20-F/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549

FORM 20-F/A

(Amendment No. 1)

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report . . . . . . . . . . . . . . . .

For the transition period from ____________ to ________________

Commission file number: 001-34238

THE9 LIMITED 

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

17 Floor, No. 130 Wu Song Road

Hong Kou District, Shanghai 200080

People’s Republic of China

(Address of principal executive offices)

George Lai, Chief Financial Officer

Tel: +86-21-6108-6080

Email: georgelai@corp.the9.com

17 Floor, No. 130 Wu Song Road

Hong Kou District, Shanghai 200080

People’s Republic of China

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
American Depositary Shares, each representing thirty Class A ordinary shares	NCTY	Nasdaq Capital Market
Class A ordinary shares, par value US$0.01 per share*		Nasdaq Capital Market*

* Not for trading, but only in connection with the listing on the Nasdaq Capital Market of American depositary shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

 None
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

As of December 31, 2020, there were 264,663,535 ordinary shares, par value US$0.01 per share, issued and outstanding, being the sum of 251,056,201 Class A ordinary shares (excluding 6,539,367 ordinary shares we reserved for issuance upon the exercise of options under our share incentive plan and for our treasury ADSs) and 13,607,334 Class B ordinary shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  ☒    No  ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ☐    No  ☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐	Accelerated filer  ☐	Non-accelerated filer  ☒
		Emerging growth company  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S. C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐ Other  ☐

* If “Other” has been checked in response to the previous question, indicate by check mark which financial statement Item the registrant has elected to follow. Item  17  ☐    Item 18  ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ☐    No  ☐

EXPLANATORY NOTE

The9 Limited (the “Company”) is filing this Amendment No. 1 (the “Amendment”) to the Company’s Annual Report on Form 20-F for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 29, 2021 (the “Original Filing”), solely for the purposes of furnishing the Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T, which was not included in the Original Filing. Exhibit 101 includes information in eXtensible Business Reporting Language (XBRL).

Other than as expressly set forth above, this Amendment does not, and does not purport to, amend, update or restate any other items or disclosures contained in the Original Filing and does not reflect events occurring after the date of the Original Filing. This Amendment consists solely of the cover page, this explanatory note, the exhibit index and the exhibits filed herewith.

Item 19. EXHIBITS

Exhibit Number	Description of Document
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to its annual report on its behalf.

The9 Limited
By:	/s/ Jun Zhu
	Name:	Jun Zhu
	Title:	Chairman and Chief Executive Officer

Date: March 30, 2021

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Document and Entity Information	12 Months Ended
	Dec. 31, 2020 shares
Document and Entity Information
Document Type	20-F/A
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity Registrant Name	The9 LTD
Document Period End Date	Dec. 31, 2020
Entity Incorporation, State or Country Code	F4
Entity Well-known Seasoned Issuer	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0001296774
Amendment Flag	false
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
American Depositary Shares
Document and Entity Information
Title of 12(b) Security	American Depositary Shares, each representingthree Class A ordinary shares
Trading Symbol	NCTY
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	15,338,560
Class A Ordinary Shares
Document and Entity Information
Title of 12(b) Security	Class A ordinary shares, par value US$0.01 per share
Trading Symbol	NCTY
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	108,154,341
Class B ordinary shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	13,607,334
Ordinary shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	0

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares	Dec. 31, 2018 CNY (¥) ¥ / shares shares
Revenues:
Revenue	$ 95,860	¥ 625,488	¥ 343,077	¥ 17,492,415
Sales taxes			(1,582)	(60,557)
Total net revenues	95,860	625,488	341,495	17,431,858
Cost of revenues	(124,772)	(814,136)	(1,342,266)	(16,435,590)
Gross profit (loss)	(28,912)	(188,648)	(1,000,771)	996,268
Operating (expenses) income:
Product development	(373,654)	(2,438,095)	(13,090,530)	(24,555,308)
Sales and marketing	(99,079)	(646,492)	(2,114,519)	(2,325,818)
General and administrative	(16,666,348)	(108,747,919)	(113,867,000)	(89,583,331)
Impairment of other long-lived assets	(998,498)	(6,515,200)	(34,881,000)
Impairment on advance and other assets	(3,122,069)	(20,371,500)
Gain on disposal of subsidiaries	72,887,173	475,588,803	1,206,925	10,473,159
Total operating (expenses) income	51,627,525	336,869,597	(162,746,124)	(105,991,298)
Other operating income, net	4,193	27,358	30,240	229,538
(Loss) income from operations	51,602,806	336,708,307	(163,716,655)	(104,765,492)
Impairment on equity investments	(179,733)	(1,172,755)	(4,666,128)	(1,386,174)
Impairment on other investments	(2,758,621)	(18,000,000)	(3,791,039)	(7,776,157)
Impairment on other advances			(5,980,788)
Interest income	65,859	429,732	18,576	193,928
Interest expense	(623,782)	(4,070,179)	(34,501,556)	(104,776,674)
Fair value change on warrants liability	5,801	37,851	1,292,244	2,251,427
Gain on disposal of equity investee and available-for-sale investments	26,712	174,295	694,628
Gain on disposal of other investments	431,976	2,818,643	13,430,588
Gain on extinguishment of convertible notes	8,698,223	56,800,000	0	0
Gain on waiver of interest-free loan	5,424,904	35,397,500	0	0
Foreign exchange gain (loss)	(1,275,045)	(8,319,669)	(5,474,002)	(20,331,430)
Other income (expenses), net	307,302	2,005,143	9,372,652	1,598,663
(Loss) income before income tax expense and share of loss in equity method investments	61,726,402	402,764,770	(193,321,480)	(234,991,909)
Income tax benefit	(1,098,099)	(7,165,097)	0	0
Share of loss in equity method investments	(331,944)	(2,165,935)	(2,847,260)	(4,292,887)
Net (loss) income	60,296,359	393,433,738	(196,168,740)	(239,284,796)
Net loss attributable to noncontrolling interest	(499,545)	(3,259,528)	(13,517,983)	(16,332,968)
Net loss attributable to redeemable noncontrolling interest	(182,394)	(1,190,122)	(4,855,589)	(5,858,902)
Net (loss) income attributable to The9 Limited	60,978,298	397,883,388	(177,795,168)	(217,092,926)
Change in redemption value of redeemable noncontrolling interest	(182,394)	(1,190,122)	(12,827,598)	(40,918,773)
Net (loss) income attributable to holders of ordinary shares	60,795,904	396,693,266	(190,622,766)	(258,011,699)
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	538,969	3,516,774	(793,531)	(1,314,265)
Total comprehensive (loss) income	60,835,328	396,950,512	(196,962,271)	(240,599,061)
Comprehensive (loss) income attributable to:
Noncontrolling interest	2,016,475	13,157,497	(19,738,118)	(24,888,425)
Redeemable noncontrolling interest	(182,394)	(1,190,122)	(4,855,589)	(5,858,902)
Total comprehensive loss	$ 59,001,247	¥ 384,983,137	¥ (172,368,564)	¥ (209,851,734)
Net (loss) income per share attributable to holders of ordinary shares:
- Basic and diluted | (per share)	$ 0.37	¥ 2.42	¥ (1.79)	¥ (4.15)
Weighted average number of shares outstanding:
- Basic and diluted | shares	163,599,920	163,599,920	106,407,008	62,114,760
Online Game Services [Member]
Revenues:
Revenue	$ 95,860	¥ 625,488	¥ 303,577	¥ 16,551,080
Other Revenues [Member]
Revenues:
Revenue			¥ 39,500	¥ 941,335

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CONSOLIDATED BALANCE SHEETS	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Current assets:
Cash and cash equivalents	$ 4,857,661	¥ 31,696,237	¥ 10,113,141
Accounts receivable, net of allowance for doubtful accounts of RMB1,319,331 and RMB233,213 as of December 31, 2019 and 2020, respectively	457	2,981	110,437
Advances to suppliers	4,249	27,725	11,246,608
Prepayments and other current assets, net of allowance for doubtful accounts of RMB5,343,427 and RMB 6,619,312 as of December 31, 2019and 2020, respectively	1,510,416	9,855,467	8,848,534
Amounts due from related parties	112,292	732,705	758,761
Assets classified as held-for-sale	0	0	123,390,350
Total current assets	6,485,075	42,315,115	154,467,831
Investments			10,000,000
Property, equipment and software, net	149,747	977,102	1,218,521
Operating lease right-of-use assets	789,133	5,149,090	9,257,604
Other long-lived assets, net	0	0	6,515,200
TOTAL ASSETS	7,423,955	48,441,307	181,459,156
Current liabilities:
Short-term borrowings (including short-term borrowings of the consolidated VIEs without recourse to the Group of nil as of both December 31, 2019 and 2020)			117,526,089
Accounts payable (including accounts payable of the consolidated VIEs without recourse to the Group of RMB5,640,424 and RMB5,133,008 as of December 31, 2019 and 2020, respectively)	5,455,543	35,597,417	38,232,425
Other taxes payable (including other taxes payable of the consolidated VIEs without recourse to the Group of RMB1,391,227 and RMB1,416,209 as of December 31, 2019 and 2020, respectively)	198,226	1,293,423	1,203,644
Advances from customers (including advances from customers of the consolidated VIEs without recourse to the Group of RMB64,335,073and RMB15,005,074 as of December 31, 2019and 2020, respectively)	5,825,593	38,011,992	39,527,778
Other advances (including other advances of the consolidated VIEs without recourse to the Group of RMB49,300,000 and nil as of December 31, 2019 and 2020, respectively)			56,276,200
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs without recourse to the Group of RMB59,306,848 and RMB52,987,306 as of December 31, 2019 and 2020, respectively)	4,637,278	30,258,237	74,379,529
Refund of game points (including refund of game points of the consolidated VIEs without recourse to the Group of RMB169,998,682 as of both December 31, 2019 and 2020)	26,053,438	169,998,682	169,998,682
Warrants (including warrants of consolidated VIEs without recourse to the Group of nil as of both December 31, 2019 and 2020)	284,285	1,854,957	198,600
Convertible notes (including convertible notes of consolidated VIEs without recourse to the Group of nil as of both December 31, 2019 and 2020)			414,127,908
Interest payable (including interest payable of consolidated VIEs without recourse to the Group of nil as of both December 31, 2019 and 2020)			5,371,931
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Group of RMB71,176,256 and RMB62,130,247as of December 31, 2019 and 2020, respectively)	12,807,795	83,570,873	93,140,843
Operating lease liabilities-current portion	580,415	3,787,210	3,407,670
Liabilities directly associated with assets held-for-sale	0	0	44,691,296
Total current liabilities	55,842,573	364,372,791	1,058,082,595
Non-current portion of operating lease liabilities of the consolidated VIE without recourse to the Group (including operating lease liabilities of consolidated VIEs without recourse to the Group of RMB18,287 and nil as of December 31, 2019 and 2020, respectively)	377,700	2,464,495	6,251,705
TOTAL LIABILITIES	56,220,273	366,837,286	1,064,334,300
Commitments and contingencies (Note 29)
Redeemable noncontrolling interest (Note 27)	53,493,724	349,046,548	349,046,548
SHAREHOLDERS' EQUITY (DEFICIT):
Additional paid-in capital	413,143,757	2,695,763,016	2,539,552,478
Statutory reserves	1,122,844	7,326,560	28,071,982
Accumulated other comprehensive loss	(2,556,046)	(16,678,203)	(3,777,952)
Accumulated deficit	(458,578,915)	(2,992,227,421)	(3,410,856,231)
The9 Limited shareholders' deficit	(44,094,750)	(287,718,247)	(839,039,915)
Noncontrolling interest	(58,195,292)	(379,724,280)	(392,881,777)
Total shareholders' deficit	(102,290,042)	(667,442,527)	(1,231,921,692)
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS' EQUITY	7,423,955	48,441,307	181,459,156
Class A Ordinary Shares
SHAREHOLDERS' EQUITY (DEFICIT):
Ordinary shares	2,635,565	17,197,060	7,321,099
Class B ordinary shares
SHAREHOLDERS' EQUITY (DEFICIT):
Ordinary shares	$ 138,045	¥ 900,741	¥ 648,709

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CONSOLIDATED BALANCE SHEETS (Parenthetical)	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares
Other Taxes Payable	$ 198,226	¥ 1,293,423		¥ 1,203,644
Customer Refund Liability, Current	26,053,438	169,998,682		169,998,682
Customer Advances, Current	5,825,593	38,011,992		39,527,778
Other advances				56,276,200
Accrued Expenses And Other Liabilities Current	12,807,795	83,570,873		93,140,843
Convertible Notes Payable, Current				414,127,908
Derivative Liability, Current	284,285	1,854,957		198,600
Accounts Payable, Current	5,455,543	35,597,417		38,232,425
Due to Related Parties, Current	4,637,278	30,258,237		74,379,529
Interest Payable, Current				5,371,931
Operating Lease, Liability, Current	580,415	3,787,210		3,407,670
Operating Lease, Liability, Noncurrent	377,700	2,464,495		6,251,705
Allowance for Doubtful Accounts Receivable, Current	$ 6,619,312	1,149,864	$ 5,343,427	1,319,331
Short-term Debt				117,526,089
Variable Interest Entity, Primary Beneficiary
Other Taxes Payable		1,398,996		1,391,227
Customer Refund Liability, Current		169,998,682		169,998,682
Customer Advances, Current		15,005,074		15,035,073
Other advances		49,300,000		0
Accrued Expenses And Other Liabilities Current		62,130,247		71,176,256
Convertible Notes Payable, Current		0		0
Derivative Liability, Current		0		0
Accounts Payable, Current		5,920,126		5,640,424
Due to Related Parties, Current		52,987,306		59,306,848
Interest Payable, Current		0		0
Operating Lease, Liability, Current		18,287		34,227
Operating Lease, Liability, Noncurrent		0	$ 18,287
Short-term Debt		¥ 0		¥ 0
Class A Ordinary Shares
Ordinary shares, par value | $ / shares	$ 0.01		$ 0.01
Common Stock, Shares Authorized | shares	4,300,000,000	4,300,000,000	4,300,000,000	4,300,000,000
Ordinary shares, shares issued | shares	247,090,351	247,090,351	103,737,691	103,737,691
Ordinary shares, shares outstanding | shares	247,090,351	247,090,351	103,737,691	103,737,691
Class B ordinary shares
Ordinary shares, par value | ¥ / shares		¥ 0.01		¥ 0.01
Common Stock, Shares Authorized | shares	600,000,000	600,000,000	600,000,000	600,000,000
Ordinary shares, shares issued | shares	12,942,011	12,942,011	9,192,011	9,192,011
Ordinary shares, shares outstanding | shares	12,942,011	12,942,011	9,192,011	9,192,011

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	Ordinary shares USD ($) shares	Ordinary shares CNY (¥) shares	Additional paid-in capital USD ($)	Additional paid-in capital CNY (¥)	Statutory reserves USD ($)	Statutory reserves CNY (¥)	Accumulated other comprehensive (loss) income USD ($)	Accumulated other comprehensive (loss) income CNY (¥)	Accumulated deficit USD ($)	Accumulated deficit CNY (¥)	Equity (deficit) attributable to The9 limited USD ($)	Equity (deficit) attributable to The9 limited CNY (¥)	Noncontrolling interest USD ($)	Noncontrolling interest CNY (¥)	USD ($)	CNY (¥)
Balance at Dec. 31, 2017		¥ 3,328,852		¥ 2,527,215,315		¥ 28,071,982		¥ (16,445,748)		¥ (3,015,968,137)		¥ (473,797,736)		¥ (328,553,104)		¥ (802,350,840)
Balance (in shares) at Dec. 31, 2017 | shares	44,544,036	44,544,036
Net income (loss)										(217,092,926)		(217,092,926)		(16,332,968)		(233,425,894)
Currency translation adjustments								7,241,192				7,241,192		(8,555,457)		(1,314,265)
Derecognition of noncontrolling interests														(20,000,000)		(20,000,000)
Share-based compensation				3,645,751								3,645,751		252,577		3,898,328
Change in redemption value of redeemable noncontrolling interest																(40,918,773)
Issuance of shares		¥ 3,173,806		6,126,772								9,300,578				9,300,578
Number of shares issued | shares	46,771,429	46,771,429
Accretion in redemption value of redeemable noncontrolling interest				(40,918,773)								(40,918,773)				(40,918,773)
Balance at Dec. 31, 2018		¥ 6,502,658		2,496,069,065		28,071,982		(9,204,556)		(3,233,061,063)		(711,621,914)		(373,188,952)		(1,084,810,866)
Balance (in shares) at Dec. 31, 2018 | shares	91,315,465	91,315,465
Net income (loss)										(177,795,168)		(177,795,168)		(13,517,983)		(191,313,151)
Currency translation adjustments								5,426,604				5,426,604		(6,220,135)		(793,531)
Share-based compensation	$ 6,169,335	¥ 425,593		21,279,647								21,705,240		45,293		21,750,533
Change in redemption value of redeemable noncontrolling interest																(12,827,598)
Issuance of shares		¥ 1,041,557		35,031,364								36,072,921				36,072,921
Number of shares issued | shares	15,444,882	15,444,882
Accretion in redemption value of redeemable noncontrolling interest				(12,827,598)								(12,827,598)				(12,827,598)
Balance at Dec. 31, 2019		¥ 7,969,808		2,539,552,478		28,071,982		(3,777,952)		(3,410,856,231)		(839,039,915)		(392,881,777)		(1,231,921,692)
Balance (in shares) at Dec. 31, 2019 | shares	112,929,702	112,929,702
Net income (loss)										397,883,388		397,883,388		(3,259,528)		394,623,860
Currency translation adjustments								(12,900,251)				(12,900,251)		16,417,025	$ 538,969	3,516,774
Share-based compensation		¥ 2,412,325		52,644,101								55,056,426				55,056,426
Share-based compensation (in shares) | shares	35,100,000	35,100,000
Change in redemption value of redeemable noncontrolling interest				(1,190,122)								(1,190,122)			(182,394)	(1,190,122)
Issuance of ordinary shares and warrants, net of issuance costs of RMB7,849,390		¥ 7,715,668		104,650,533								112,366,201				112,366,201
Issuance of ordinary shares and warrants, net of issuance costs of RMB7,849,390 (in shares) | shares	112,002,660	112,002,660
Equity on conversion option of convertible notes				106,026								106,026				106,026
Reversal of statutory reserves due to disposal of certain subsidiaries						(20,745,422)				20,745,422
Balance at Dec. 31, 2020	$ 2,773,610	¥ 18,097,801	$ 413,143,757	¥ 2,695,763,016	$ 1,122,844	¥ 7,326,560	$ (2,556,046)	¥ (16,678,203)	$ (458,578,915)	¥ (2,992,227,421)	$ (44,094,750)	¥ (287,718,247)	$ (58,195,292)	¥ (379,724,280)	$ (102,290,042)	¥ (667,442,527)
Balance (in shares) at Dec. 31, 2020 | shares	260,032,362	260,032,362

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical)	12 Months Ended
	Dec. 31, 2020 CNY (¥)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Stock issuance cost	¥ 7,849,390

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Cash flows from operating activities:
Net (loss) income	$ 60,296,359	¥ 393,433,738	¥ (196,168,740)	¥ (239,284,796)
Adjustments for:
Gain on disposal of property, equipment and software	(4,566)	(29,793)	(2,153,158)	(183,767)
Gain on disposal of subsidiaries	(72,887,173)	(475,588,803)	(1,206,925)	(10,473,159)
Gain on disposal of other investments	(431,976)	(2,818,643)	(13,430,588)	0
Share-based compensation expenses	8,437,766	55,056,426	21,750,533	3,898,328
Impairment on equity investments	179,733	1,172,755	4,666,128	1,386,174
Impairment on other investments	2,758,621	18,000,000	3,791,039	7,776,157
Impairment on other long-lived assets	998,498	6,515,200	34,881,000	0
Provision for doubtful accounts receivable	15,862	103,501	169,416	109,939
Impairment on advances to suppliers	3,172,396	20,699,885	0	7,765,482
Impairment on other advances			5,980,787	0
Provision for doubtful other receivables	343,976	2,244,446	0	21,042,700
Consulting fees paid by issuance of shares	1,039,359	6,781,815	35,091,686	4,172,800
Gain on extinguishment of convertible notes	(8,698,223)	(56,800,000)	0	0
Depreciation and amortization of property, equipment and software	68,626	400,000	2,778,778	3,650,261
Amortization of land use right		0	1,440,682	1,920,910
Share of loss in equity method investments	331,944	2,165,935	2,847,260	4,292,887
Gain on disposal of investment in equity investee and available-for-sales investment	(26,712)	(174,295)	(694,628)	0
Foreign currency exchange, loss	1,275,045	8,319,669	5,474,002	20,331,430
Fair value change on warrant liability	(5,801)	(37,851)	(1,292,244)	(2,251,427)
Amortization of discount and interest on convertible notes	448,018	2,923,316	33,154,191	98,308,205
Gain on waiver of interest-free loan	(5,424,904)	(35,397,500)	0	0
Payment of issuance cost by issuance of shares Iliad	69,833	455,658	0	0
Non-cash lease expense	107,239	699,733	409,048	0
Changes in operating assets and liabilities
Change in accounts receivable	606	3,955	313,044	1,904,732
Change in advances to suppliers	(3,000,149)	(19,575,974)	(1,419,353)	(1,400,665)
Change in prepayments and other current assets	(440,932)	(2,877,084)	(6,628,897)	(20,575,190)
Change in right-of-use assets	522,419	3,408,781	(9,666,652)	0
Change in other long-lived assets			0	6,220
Change in accounts payable	(403,833)	(2,635,008)	246,764	905,990
Change in amounts due to related parties	(237,563)	(1,550,100)	3,144,106	(1,628,877)
Change in other taxes payable	13,759	89,779	(491,112)	1,234,090
Change in advances from customers	(232,304)	(1,515,786)	(15,887)	(2,336,252)
Change in deferred revenue			(159,125)	(5,417,144)
Change in interest payable	(823,284)	(5,371,931)	1,457,811	6,053,191
Change in accrued expenses and other current liabilities	(3,224,414)	(21,039,288)	11,896,337	(2,408,745)
Change in lease liabilities	(522,248)	(3,407,670)	9,659,375	0
Net cash used in operating activities	(16,284,023)	(106,253,254)	(54,175,322)	(101,200,526)
Cash flows from investing activities
Proceeds from disposal of subsidiaries	68,036,781	443,939,997	0	0
Proceeds from disposal of assets and liabilities classified as held- for- sale			49,300,000	2,800,000
Proceeds from disposal of other investments			37,026,498	0
Proceeds from disposal of equity investee and available-for-sale investments			694,628	0
Proceeds from disposal of property, equipment and software	28,046	183,003	2,648,259	81,848
Proceed from tokens transferred			6,887,915	0
Refund from subscribed tokens	894,785	5,838,471	0	0
Purchase of equity method investments	(511,677)	(3,338,690)	0	0
Purchase of other investments	(1,226,054)	(8,000,000)	0	(5,300,000)
Deposit for joint venture arrangement			(34,881,000)	0
Advances to subscribed tokens			0	(14,070,581)
Disbursement for loans receivable from a related party			0	(600,000)
Purchase of property, equipment and software	(55,107)	(359,573)	(796,921)	(226,717)
Net cash (used in) provided by investing activities	67,166,774	438,263,208	60,879,379	(17,315,450)
Cash flows from financing activities:
Proceeds from the issuance of ordinary shares and warrants	7,268,995	47,430,195	0	0
Proceeds from the issuance of convertible note	514,693	3,358,369	0	0
Loans from a related party			16,065,376	11,030,602
Repayment of loans to a related party	(6,520,327)	(42,545,136)	(10,023,576)	(29,127,540)
Proceeds from other loans			34,881,000	0
Repayments of other loans			0	(260,073)
Repayments of convertible notes	(48,878,103)	(318,929,623)	0	0
Non-cash investing and financing activities	(47,614,742)	(310,686,195)	40,922,800	(18,357,011)
Effect of foreign exchange rate changes on cash and cash equivalents	39,745	259,337	1,257,310	(1,494,584)
Cash reclassified as held for sale			(43,027,475)	0
Net change in cash and cash equivalents	3,307,754	21,583,096	5,856,692	(138,367,571)
Cash and cash equivalents, beginning of period	1,549,907	10,113,141	4,256,449	142,624,020
Cash and cash equivalents, end of period	4,857,661	31,696,237	10,113,141	4,256,449
Non-cash investing and financing activities
Shares issued for equity investments and other investments			236,667	3,091,986
Cash paid for amounts included in the measurement of operating lease liabilities	$ 435,627	¥ 2,842,464	¥ 1,271,769	¥ 0

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ORGANIZATION AND NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2020

ORGANIZATION AND NATURE OF OPERATIONS

ORGANIZATION AND NATURE OF OPERATIONS

1. ORGANIZATION AND NATURE OF OPERATIONS

The accompanying consolidated financial statements include the financial statements of The9 Limited (the “Company”), which was incorporated on December 22, 1999 in the Cayman Islands, its subsidiaries and variable interest entities (“VIE subsidiaries” or ”VIEs”), (collectively referred to as the “Group”).

The Group is based in China targeting fast-growing technology businesses. The Group is transitioning from an online game operation business to a cryptocurrencies mining business.

The Company’s principal subsidiaries and VIEs are as follows as of December 31, 2020:

	Date of	Place of	Legal
Name of Entity	Registration	Registration	Ownership
Principal subsidiaries:
GameNow.net (Hong Kong) Ltd. ("GameNow Hong Kong")	January‑2000	Hong Kong	100	%
China The9 Interactive Limited (“C9I”)	October‑2003	Hong Kong	100	%
China The9 Interactive (Beijing) Ltd. (“C9I Beijing”)	March‑2007	PRC	100	%
JiuTuo (Shanghai) Information Technology Ltd. ("Jiu Tuo")	July-2007	PRC	100	%
China Crown Technology Ltd. ("China Crown Technology")	November‑2007	Hong Kong	100	%
Asian Way Development Ltd. (“Asian Way”)	November‑2007	Hong Kong	100	%
New Star International Development Ltd. (“New Star”)	January‑2008	Hong Kong	100	%
Red 5 Studios, Inc. (“Red 5”)(Note 2.2)	June‑2005	USA	34.71	%
Red 5 Singapore Pte. Ltd. (“Red 5 Singapore”) (Note 2.2)	April‑2010	Singapore	34.71	%
The9 Interactive, Inc. (“The9 Interactive”)	June‑2010	USA	100	%
Shanghai Jiu Gang  Electronic Technology Ltd. (“Jiu Gang”)	December‑2014	PRC	100	%
City Channel Ltd. (“City Channel”)	June‑2006	Hong Kong	100	%
The9 Singapore Pte. Ltd. (“The9 Singapore”)	April‑2010	Singapore	100	%
Ninebit Inc. (“Ninebit”)	January -2018	Cayman Islands	100	%
1111 Limited (“1111”)	January -2018	Hong Kong	100	%
Supreme Exchange Limited (“Supreme”)	December‑2018	Malta	90	%
BET 111 Ltd. ("Bet 111")	January -2019	Malta	90	%
Coin Exchange Ltd ("Coin")	January -2019	Malta	90	%
The9 EV  Limited ("The9 EV")	May-2019	Hong Kong	100	%
NBTC Limited (“NBTC”)	June-2019	Hong Kong	100	%
FF The9 China Joint Venture Limited ("FF The9")	September-2019	Hong Kong	50	%
Huiling Computer Technology Consulting (Shanghai) Co.Ltd. ("Huiling")	March-2019	PRC	100	%
Leixian Information Technology (Shanghai) Co., Ltd. ("Leixian")	March-2019	PRC	100	%
Variable interest entity:
Shanghai The9 Information Technology Co., Ltd. (“Shanghai IT”) (Note 4)	September‑2000	PRC	N/A

Subsidiaries and VIEs of Shanghai IT:

			Legal
	Date of	Place of	Ownership Held
Name of Entity	Registration	Registration	by Shanghai IT
Shanghai Jiushi Interactive Network Technology Co., Ltd. (“Jiushi”)	July‑2011	PRC	80	%
Shanghai ShencaiChengjiu Information Technology Co., Ltd. (“SH Shencai”)	May‑2015	PRC	60	%
Shanghai Zhiaojiqi Information Technology Co., Ltd. (“Shanghai Zhiaojiqi”)	November-2015	PRC	0	%
Wuxi Interest Dynamic Network Technology Co., Ltd. (“Wuxi Qudong”)	June‑2016	PRC	100	%
Changsha Quxiang Network Technology Co., Ltd. (“Changsha Quxiang”)	July‑2016	PRC	100	%
Silver Express Investments Ltd. (“Silver Express”)	November‑2007	Hong Kong	100	%

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PRINCIPAL ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

PRINCIPAL ACCOUNTING POLICIES

PRINCIPAL ACCOUNTING POLICIES

2. PRINCIPAL ACCOUNTING POLICIES

<1> Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below.

The accompanying consolidated financial statements have been prepared on a going concern basis. The Group has an accumulated deficit of approximately RMB2,992.2 million (US$458.6 million) and total current liabilities exceeded total assets by approximately RMB315.9 million (US$48.4 million) as of December 31, 2020. The Group expects to purchase cryptocurrencies mining machines to build its cryptocurrencies mining business in order to achieve overall revenue growth.

To meet its capital needs, the Group is considering multiple alternatives, including but not limited to additional equity or debt financing as outlined below. There can be no assurance that the Group will be able to complete any such transaction on acceptable terms or otherwise. If the Group is unable to obtain the necessary capital, it will need to pursue a plan to license or sell its assets, seek to be acquired by another entity, or cease operations.

These factors raise substantial doubt about the Group’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset or liability amounts that might result from the outcome of this uncertainty.

Additional Equity or Debt Financing

In October 2020, the Company completed a share offering by issuing 70,500,000 Class A ordinary shares and 27,025,000 warrants to purchase 2,702,500 American Depositary Shares (“ADS”), each ADS representing thirty Class A ordinary shares and each warrant exercisable for the purchase of 0.1 ADS, including 3,525,000 warrants to purchase an additional 352,500 ADSs, pursuant to the over-allotment option granted to the underwriter to purchase additional warrants to cover over-allotments with an exercise price of US$3.70 per ADS. In connection with such offering, the Company also issued representative’s warrants to purchase 117,500 ADSs, each representing thirty Class A ordinary shares, to the underwriter of the offering with an exercise price of US$4.07 per ADS. The Company received net proceeds of US$8.1 million from such offering. The Company classified the representative warrants as a financial liability and the remaining warrants as equity.

In February 2021, the Company issued and sold (i) a one-year convertible note in a principal amount of US$5,000,000, (ii) 50,000 ADSs, and (iii) 10,000,000 Class A ordinary shares, for an aggregate consideration of US$5,000,000 to Streeterville Capital LLC (“Streeterville”). The convertible note bears interest at a rate of 6.0% per year, computed on the basis of a 360-day year. Streeterville has the right, at any time after six months have elapsed since the purchase date until the outstanding balance has been paid in full, at its election, to convert all or any portion of the outstanding balance into ADSs of the Company’s at an initial conversion price of US$14.00 per ADS, each ADS representing thirty Class A ordinary shares, subject to adjustment. Beginning on the date that is six months from the note purchase date, Streeterville has the right, exercisable at any time in its sole and absolute discretion, to redeem any portion of the convertible note up to US$840,000 per calendar month. Payment of the redemption amount could be in cash or the Company’s ADSs, provided that any redemption made in cash which exceeds half of the original principal amount will be subject to a ten percent (10%) premium. The Company has the right to prepay all or any portion of the outstanding balance, at any time, subject to fifteen percent (15%) premium on the prepaid amount. In the event the principal amount and interest accrued for the convertible note issued to Streeterville are fully repaid, the Company has the right to repurchase the remaining Class A ordinary shares held by Streeterville that are unsold at US$0.0001 per share.

In February 2021, the Group entered into a standby equity distribution agreement (“SEDA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership managed by Yorkville Advisor Global, LP, pursuant to which the Group is able to sell up to US$100.0 million of the Company’s ADSs solely at the Group’s request at any time during the 36 months following the date of the SEDA. The preliminary purchase price per ADS shall be adjusted to the greater of (A) 90% of the average of the 3 lowest daily volume weighted average price of the Company’s ADSs and during the five consecutive trading days commencing on the trading day immediately following the preliminary closing date or (B) 85% of the average of the five daily volume weighted average price of the Company’s ADSs during the secondary pricing period. The Group intends to use the proceeds from the potential offering of the ADSs pursuant to the SEDA to fund the working capital required on business growth in the cryptocurrencies mining operation. The Group intends to obtain financing via the issuance of Class A ordinary shares and warrants through public or private placements, as needed.

<2> Consolidation

The consolidated financial statements include the financial statements of The9 Limited, its subsidiaries and VIEs in which it has a controlling financial interest. A subsidiary is consolidated from the date on which the Group obtained control and continues to be consolidated until the date that such control ceases. A controlling financial interest is typically determined when a company holds a majority of the voting equity interest in an entity. If the Group demonstrates its ability to control a VIE through its rights to all the residual benefits of the VIE and its obligation to fund losses of the VIE, then the VIE is consolidated. All intercompany balances and transactions between The9 Limited, its subsidiaries and VIEs have been eliminated in consolidation.

In April 2010, the Group acquired a controlling interest in Red 5. In June 2016, the Group completed a share exchange transaction with L&A International Holding Limited (“L&A”) and certain other shareholders of Red 5. After the transaction, the Group owned 34.71% shareholding in Red 5. As the Group controls a majority of Board of Director seats and only a majority vote is required to approve Board of Director resolutions, and as the Group has continuously funded the operation of Red 5, the Group still retained effective control over Red 5. Red 5 remained as a consolidated entity of the Group as of December 31, 2020.

PRC laws and regulations currently prohibit or restrict foreign ownership of internet-related business. In September 2009, the General Administration of Press and Publication Radio, Film and Television (“GAPPRFT”) further promulgated the Circular Regarding the Implementation of the Department Reorganization Regulation by State Council and Relevant Interpretation by State Commission Office for Public Sector Reform to Further Strengthen the Administration of Pre-approval on Online Games and Approval on Import Online Games (the “GAPP Circular”). Pursuant to Administrative Measures on Network Publication (the “Network Publication Measures”) jointly issued by GAPPRFT and the Ministry of Information Industry (which has subsequently been reorganized as the Ministry of Industry and Information Technology) (“MIIT”) on February 4, 2016, effective from March 2016, wholly foreign-owned enterprises, Sino-foreign equity joint ventures and Sino-foreign cooperative enterprises shall not engage in the provision of web publishing services, including online game services. Prior examination and approval by GAPPRFT are required on project cooperation involving internet publishing services between an internet publishing services and a wholly foreign-owned enterprise, Sino-foreign equity joint venture, or Sino-foreign cooperative enterprise within China or an overseas organization or individual. It is unclear whether PRC authorities will deem the Group’s VIE structure as a kind of such “manners of cooperation” by foreign investors to gain control over or participate in domestic online game operators, and it is not clear whether GAPPRFT and MIIT have regulatory authority over the ownership structures of online game companies based in China and online game operations in China. Therefore, the Group believes that its ability to direct those activities of its VIEs that most significantly impact their economic performance is not affected by the GAPP Circular.

<3> Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenues and expenses during the reported periods. Significant accounting estimates reflected in the Group’s consolidated financial statements include the valuation of non-marketable equity investments and determination of other-than-temporary impairment, allowance for doubtful accounts, revenue recognition, assessment of impairment of other long-lived assets, assessment of impairment of advances to suppliers and other advances, incremental borrowing rates for lease assessment, fair value of redeemable noncontrolling interest, fair value of the warrants, share-based compensation expenses, consolidation of VIEs, valuation allowances for deferred tax assets, and contingencies. Such accounting policies are affected significantly by judgments, assumptions and estimates used in the preparation of the Group's consolidated financial statements, and actual results could differ materially from these estimates.

<4> Foreign currency translation

The Group’s reporting currency is the Renminbi (“RMB”). The Group’s functional currency, with the exception of its subsidiaries, Red 5, The9 Interactive, and Red 5 Singapore, is the RMB. The functional currency of Red 5, The9 Interactive, and Red 5 Singapore, is the United States dollar ("US$" or "U.S. dollar"), U.S. dollar, and Singapore dollar, respectively. Assets and liabilities of Red 5, The9 Interactive, and Red 5 Singapore, are translated at the current exchange rates quoted by the People’s Bank of China (the “PBOC”) in effect at the balance sheet dates. Equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average exchange rates in effect during the reporting period to RMB. Gains and losses resulting from foreign currency translation to reporting currency are recorded in accumulated other comprehensive (loss) income in the consolidated statements of changes in equity for the years presented.

Transactions denominated in currencies other than functional currencies, are translated into functional currencies at the exchange rates prevailing at the dates of the transactions. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations and comprehensive loss. Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies using the applicable exchange rates at the balance sheet dates. All such exchange gains and losses are included in foreign exchange loss in the consolidated statements of operations and comprehensive (loss) income.

<5> Cash and cash equivalents

Cash and cash equivalents represent cash on hand and highly liquid investments with a maturity date when acquired of three months or less. As of December 31, 2019 and 2020, cash and cash equivalents were comprised primarily of bank deposits where cash is deposited with reputable financial institutions. Included in cash and cash equivalents as of December 31, 2019 and 2020 are amounts denominated in U.S. dollar totaling US$0.35 million and US$4.6 million, respectively.

The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PBOC, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in China’s foreign exchange trading system market. The Group’s aggregate amount of cash and cash equivalents denominated in RMB amounted to RMB7.6 million and RMB1.1 million (US$0.2 million) as of December 31, 2019 and 2020, respectively.

<6> Allowance for doubtful accounts

Starting from January 1, 2020, the Group adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost and is codified in Accounting Standards Codification (“ASC”) Topic 326, Credit Losses (“ASC 326”). ASU 2016-13 replaces the existing incurred loss impairment model and introduces an expected loss approach with macroeconomic forecasts referred to as a current expected credit losses (“CECL”) methodology, which will result in more timely recognition of credit losses. There was no significant impact on its consolidated financial statements and related disclosures as a result. Under the incurred loss methodology, credit losses are only recognized when the losses are probable of having been incurred. The CECL methodology requires that the full amount of expected credit losses for the lifetime of the financial instrument be recorded at the time it is originated or acquired, considering relevant historical experience, current conditions and reasonable and supportable macroeconomic forecasts that affect the collectability of financial assets, and adjusted for changes in expected lifetime credit losses subsequently, which may require earlier recognition of credit losses.

Accounts receivable mainly consist of receivables from third-party game platforms, and other receivables, which are included in prepayments and other current assets, both of which are recorded net of allowance for doubtful accounts. Allowances for doubtful accounts are charged to general and administrative expenses. The Group provided an allowance for doubtful accounts of RMB21.2 million, RMB0.2 million and RMB2.3 million (US$0.4 million) for the years ended December 31, 2018, 2019 and 2020, respectively. The Group has written-off an amount of RMB22.2 million, RMB3.2 million and RMB2.1 million (US$0.3 million) for the years ended December 31,2018, 2019 and 2020, respectively.

<7> Investments in equity method investee and loan to equity method investee

Equity investments are comprised of investments in privately held companies. The Group uses the equity method to account for an equity investment over which it has the ability to exert significant influence but does not otherwise have control. The Group records equity method investments at the cost of acquisition, plus the Group’s share in undistributed earnings and losses since acquisition. For equity investments over which the Group does not have significant influence or control, the cost method of accounting is used.

The Group has historically provided financial support to certain equity investees in the form of loans. If the Group’s share of the undistributed losses exceeds the carrying amount of an investment accounted for by the equity method, the Group continues to report losses up to the investment carrying amount, including any loans balance due from the equity investees.

The Group assesses its equity investments and loans to equity investees for impairment on a periodic basis by considering factors including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the technological feasibility of the investee’s products and technologies, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, cash burn rate, and other company-specific information including recent financing rounds. If it has been determined that the equity investment is less than its related fair value and that this decline is other-than-temporary, the carrying value of the investment and loan to equity investee is adjusted downward to reflect these declines in value.

<8> Property, equipment and software, net

Property, equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:

Leasehold improvements	Shorter of respective lease term or estimated useful life
Computer and equipment	3 to 4 years
Software	5 years
Office furniture and fixtures	3 years
Motor vehicles	5 years
Office buildings	10 to 20 years

In September 2019, the Group entered into a sale purchase agreement with Kapler Pte. Ltd. to sell three subsidiaries which hold the land use rights and office buildings located at Zhangjiang, Shanghai. The transaction for the disposal of three subsidiaries was completed in February 2020 and the Group owned no office buildings as of December 31, 2020.

<9> Assets held for sale

Assets and asset disposal groups are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Long-lived assets to be sold are classified as held for sale if all the recognition criteria in ASC 360-10-45-9 are met:

· Management, having the authority to approve the action, commits to a plan to sell the asset;

· The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;

· An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated;

· The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year;

· The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

· Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Assets and liabilities classified as held-for-sale are measured at lower of their carrying amount or fair value less costs to sell.

<10> Land use rights, net

Land use rights represents operating lease prepayments to the PRC’s Land Bureau for usage of the parcel of land located at Zhangjiang, Shanghai. Amortization is calculated using the straight-line method over the estimated land use rights period of 44 years.

In September 2019, the Group entered into a sale purchase agreement with Kapler Pte. Ltd. to sell three subsidiaries which hold the land use rights and office buildings located at Zhangjiang, Shanghai. The transaction for the disposal of three subsidiaries was completed in February 2020 and the Group owned no land use rights as of December 31, 2020.

<11> Impairment of long-lived assets

The Group evaluates its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than the Group had originally estimated. The Group assesses the recoverability of the long-lived assets by comparing the carrying amount to the estimated future undiscounted cash flow expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets.

Indefinite-lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess.

<12> Revenue recognition

Revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration of the Group expects to be entitled to in exchange for those goods or services. Depending on the terms of the contract and the laws that apply to the contract, control of the goods or services may be transferred over time or at a point in time.

Online game services

The Group earns revenue from provision of online game operation services to players on the Group’s game servers and third-party platforms and overseas licensing of the online game to other operators. The Group grants operation right on authorized games, together with associated services which are rendered to the customers over time. The Group adopts virtual item / service consumption model for the online game services. Players can access certain games free of charge, but many purchase game points to acquire in-game premium features. The Group may act as principal or agent through the various transaction arrangements.

The determination on whether to record the revenue gross or net is based on an assessment of various factors, including but not limited to whether the Group (i) is the primary obligor in the arrangement; (ii) has general inventory risk; (iii) changes the product or performs part of the services; (iv) has latitude in establishing the selling price; (v) has involvement in the determination of product or service specifications. The assessment is performed for all licensed online games.

When acting as principal

Revenues from online game operation operated through telecom carriers and certain online games operators are recognized upon consumption of the in-game premium features based on gross revenue sharing-payments to third-party operators, but net of value-added tax (“VAT”). The Group earns revenue from the sale of in-game virtual items. Revenues are recognized as the virtual items are consumed or over the estimated lives of the virtual items, which are estimated by considering the average period that players are active and players’ behavior patterns derived from operating data. Accordingly, commission fees paid to third-party operators are recorded as cost of revenues.

When acting as agent

With respect to games license arrangements entered into by third-party operators, if the terms provide that (i) third-party operators are responsible for providing game desired by the game players; (ii) the hosting and maintenance of game servers for running the games is the responsibility of third-party operators; (iii) third-party operators have the right to review and approve the pricing of in-game virtual items and the specification, modification or update of the game made by the Group; and (iv) publishing, providing payment solution and market promotion services are the responsibilities of third-party operators and the Group is responsible to provide intellectual property licensing and subsequent technical services, then the Group considers itself as an agent of the third-party operators in such arrangement with game players. Accordingly, the Group records the game revenues from these licensed games, net of amounts paid to the third-party operators.

Licensing revenue

The Group licenses its online games, most of which are developed in house, to third parties. The Group receives monthly revenue-based royalty payments from the third-party licensee operators. Monthly revenue-based royalty payments are recognized when the relevant services are delivered, provided that collectability is reasonably assured. The Group views the third-party licensee operators as its customers and recognizes revenues on a net basis, as the Group does not have the primary responsibility for fulfillment and acceptability of the game services. The Group receives additional up-front license fees from certain third-party licensee operators who are entitled to an exclusive right to access the games where initial license fee is allocated solely on the license. License fees are recognized as revenue evenly throughout the license period after commencement of the game, given that the Group’s intellectual property rights subject to the license are considered to be symbolic and the licensee has the right to access such intellectual property rights as they exist over time when the license is granted.

Technical services

Technical services are blockchain-related consulting services where the Group is to provide designing, programming, drafting of white papers, and related services to customers. These revenues are recognized when delivery of the services has occurred or when services have been rendered and the collection of the related fees is reasonably assured.

Contract balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenue recognized prior to invoicing, where the Group has satisfied its performance obligations and has the unconditional right to payment.

Deferred revenue related to unsatisfied performance obligations at the end of the period primarily consists of fees received from game players for online game services and technical services. For deferred revenue, due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. Of the deferred revenue balance at the beginning of the period, revenue of RMB 0.2 million and nil was recognized during the years ended December 31, 2019 and 2020, respectively.

<13> Advances from customers

The Group licenses proprietary games to operators in other countries and receives license fees and royalty income. License fees received in advance of the monetization of the game is recorded in advances from customers.

<14> Convertible notes

Convertible Notes and Beneficial Conversion Feature ("BCF")

The Group issued convertible notes and warrants in December 2015. The Group has evaluated whether the conversion feature of the notes is considered an embedded derivative instrument subject to bifurcation in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities. Based on the Group’s evaluation, the conversion feature is not considered an embedded derivative instrument subject to bifurcation as the conversion option does not provide the holder of the notes with means to net settle the contracts. Convertible notes, for which the embedded conversion feature does not qualify for derivative treatment, are evaluated to determine if the effective rate of conversion per the terms of the convertible notes agreement is below market value. In these instances, the value of the BCF is determined as the intrinsic value of the conversion feature is recorded as deduction to the carrying amount of the notes and credited to additional paid-in-capital. For convertible notes issued with detachable warrants, a portion of the note’s proceeds is allocated to the warrant based on the fair value of the warrants at the date of issuance. The allocated fair value for the warrants and the value of the BCF are both recorded in the consolidated financial statements as a debt discount from the face amount of the notes, which is then accreted to interest expense over the life of the related debt using the effective interest method.

The Group present the occurred debt issuance costs as a direct deduction from the convertible notes. Amortization of the costs is reported as interest expense.

Upon the extinguishment of the convertible notes, the reacquisition price is allocated to the repurchased beneficial conversion feature measured at the intrinsic value as of the extinguishment date, the residual amount allocated to convertible debt. The difference between the reacquisition price of convertible debt and the net carrying amount of the extinguished convertible debt is recognized as gain or loss in the statement of operations and comprehensive (loss) gain of the period of extinguishment.

<15>Warrants

The Group accounts for the detachable warrants issued in connection with convertible notes under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock. The Group classifies warrants in its consolidated balance sheet as a liability which is revalued at each balance sheet date subsequent to the initial issuance. The Group uses the Black-Scholes-Merton pricing model (the “Black-Scholes Model”) to value the detachable warrants issued in connection with convertible notes and uses binomial option pricing model to value the warrants issued in connection with equity-linked instrument. Determining the appropriate fair-value model and calculating the fair value of warrants requires considerable judgment. A small change in the estimates used may cause a relatively large change in the estimated valuation. The estimated volatility of the Group’s common stock at the date of issuance, and at each subsequent reporting period, is based on historical fluctuations in the Company’s stock price. The risk-free interest rate is based on United States Treasury zero-coupon issues with a maturity similar to the expected remaining life of the warrants at the valuation date. The expected life of the warrants is based on the historical pattern of exercises of warrants.

The Group accounts for the warrants issued in connection with equity-linked instrument under authoritative guidance on accounting from ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Group classifies warrants in its consolidated balance sheet as a liability or equity based on the nature and characteristics of each warrant issued. The proceeds are allocated first to the liability classified warrants at the full fair value then the remaining proceeds allocated to the equity instruments offered. For liability classified warrants, the warrants are initial recognized on its fair value as of issuance date then remeasured at each reporting period and adjusted to fair value. The changes in the fair value of the warrant liability are recorded in the income of the period.

<16> Cost of revenues

Cost of revenues consists primarily of online game royalties, payroll, revenue sharing to third-party game platform, telecom carriers and other suppliers, maintenance and rental of Internet data center sites, depreciation and amortization of computer equipment and software, and other overhead expenses directly attributable to the services provided.

<17> Product development costs

For software development costs, including online games, to be sold or marketed to customers, the Group expenses software development costs incurred prior to reaching technological feasibility. Once a software product has reached technological feasibility, all subsequent software costs for that product are capitalized until that product is released for marketing. After an online game is released, the capitalized product development costs are amortized over the estimated product life. For the years ended December 31, 2018, 2019 and 2020, although software products have reached technological feasibility, total software costs incurred subsequent to reaching technological feasibility were immaterial and therefore not capitalized.

For website and internally used software development costs, the Group expenses all costs incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and software. Costs incurred in the application and infrastructure development phase are capitalized and amortized over the estimated product life. Since the inception of the Group, the amount of internally generated costs qualifying for capitalization has been immaterial and, as a result, all website and internally used software development costs have been expensed as incurred.

Product development costs consist primarily of outsourced research and development, payroll, depreciation charges and other overhead for the development of the Group’s proprietary games. Other overhead product development costs include costs incurred by the Group to develop, maintain, monitor, and manage its websites.

<18> Sales and marketing expenses

Sales and marketing expenses consist primarily of advertising and promotional expenses, payroll and other overhead expenses incurred by the Group’s sales and marketing personnel. Advertising expenses in the amount of RMB 0.3 million, RMB0.2 million and RMB0.1 million (US$0.02 million) for the years ended December 31, 2018, 2019 and 2020, respectively, were expensed as incurred.

<19> Government grants

Unrestricted government subsidies from local government agencies allowing the Group full discretion to utilize the funds were RMB1.6 million, RMB1.2 million and RMB 0.1 million (US$0.02 million) for the years ended December 31, 2018, 2019 and 2020, respectively, which were recorded in other income, net in the consolidated statements of operations and comprehensive loss.

<20> Share-based compensation

The Group has granted share-based compensation awards to certain employees under several equity plans. The Group measures the cost of employee services received in exchange for an equity award, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Group recognizes share-based compensation expense over the requisite service period. For performance and market-based awards which also require a service period, the Group uses graded vesting over the longer of the derived service period or when the performance condition is considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes Model with assumptions made regarding expected term, volatility, risk-free interest rate, and dividend yield. The fair value of the stock options containing a market condition is estimated using a Monte Carlo simulation model. For options awarded by private subsidiaries of the Group, the fair value of shares is estimated based on the equity value of the subsidiary. The Group evaluates the fair value of the subsidiary by making judgments and assumptions about the projected financial and operating results of the subsidiary. Once the equity value of the subsidiary is determined, it is allocated (as applicable) into the various classes of shares and options using the option-pricing method, which is one of the generally accepted valuation methodologies. On January 1, 2019, the Group adopted ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvement to Nonemployee Share-based Payment Accounting ("ASU 2018-07") to amend the accounting for share-based payment awards issued to nonemployees. Under ASU 2018-07, the accounting for awards to non-employees is similar to the model for employee awards.

The expected term represents the period of time that stock-based awards granted are expected to be outstanding. The expected term of stock-based awards granted is determined based on historical data on employee exercise and post-vesting employment termination behavior. Expected volatilities are based on historical volatilities of the Company’s ordinary shares. Risk-free interest rate is based on United States government bonds issued with maturity terms similar to the expected term of the stock-based awards.

The Group recognizes compensation expense, net of estimated forfeitures, on all share-based awards on a straight-line basis over the requisite service period, which is generally a one-to-four year vesting period or in the case of market-based awards, over the greater of the vesting period or derived service period. Forfeiture rate is estimated based on historical forfeiture patterns and adjusted to reflect future changes in circumstances and facts, if any. If actual forfeitures differ from those estimates, the estimates may need to be revised in subsequent periods. The Group uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

For stock option modifications, the Group compares the fair value of the original award immediately before and after the modification. For modifications, or probable-to-probable vesting conditions, the incremental fair value of fully vested awards is recognized as expense on the date of the modification, with the incremental fair value of unvested awards recognized ratably over the new service period.

<21> Leases

The Group applied ASC 842, Leases, on January 1, 2019 on a modified retrospective basis and has elected not to recast comparative periods. Right-of-use ("ROU") assets represent the Group's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As most of the Group's leases do not provide an implicit rate, the Company uses the PBOC's incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Group's lease terms may include options to extend or terminate the lease. Renewal options are considered within the ROU assets and lease liability when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, the Group has elected to not recognize a lease liability or ROU asset on its consolidated balance sheet. Instead, it recognizes the lease payments as expense on a straight-line basis over the lease term. Short-term lease expense is immaterial to its consolidated statements of operations, comprehensive loss, and cash flows. The Group has operating lease agreements with insignificant non-lease components and has elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

<22> Income taxes

Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. Income taxes are accounted for under the asset and liability method. Deferred taxes are determined based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized as income in the period of change. A valuation allowance is provided on deferred tax assets to the extent that it is more likely than not that such deferred tax assets will not be realized. The total income tax provision includes current tax expenses under applicable tax regulations and the change in the balance of deferred tax assets and liabilities.

The Group recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. Income tax related interest is classified as interest expenses and penalties as income tax expense.

<23> Redeemable noncontrolling interests

Redeemable noncontrolling interests are equity interests of the Group's consolidated subsidiary not attributable to the Group that has redemption features that are not solely within the Group’s control. These interests are classified as temporary equity because their redemption is considered probable. These interests are measured at the greater of estimated redemption value at the end of each reporting period or the initial carrying amount of the redeemable noncontrolling interests adjusted for cumulative earnings (loss) allocations.

<24> Noncontrolling interest

A noncontrolling interest in a subsidiary or VIE of the Group represents the portion of the equity (net assets) in the subsidiary or VIE not directly or indirectly attributable to the Group. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and modifies the presentation of net (loss) income by requiring earnings and other comprehensive income loss to be attributed to controlling and noncontrolling interest.

<25> (Loss) income per share

Basic (loss) income per share is computed by dividing net (loss) income attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted (loss) income per share is calculated by dividing net (loss) income attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. Ordinary share equivalents of stock options and warrants are calculated using the treasury stock method and are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net (loss) income is recorded.

<26> Segment reporting

The Group has one operating segment whose business is developing and operating online games and related services. The Group’s chief operating decision maker is the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group generates its revenues from customers in Greater China and other areas.

<27> Certain risks and concentration

Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and prepayments and other current assets. As of December 31, 2019 and 2020, substantially all of the Group’s cash and cash equivalents were held by major financial institutions, which management believes are of high credit worthiness.

<28> Fair value measurements

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 considers assumptions that market participants would use when pricing the asset or liability. The fair value measurement guidance provides a fair value hierarchy that 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 as follows:

Level 1 inputs are unadjusted quoted prices in active markets for identical assets that the management has the ability to access at the measurement date.

Level 2 inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 inputs include unobservable inputs to the valuation methodology that reflect management’s assumptions about the assumptions that market participants would use in pricing the asset. Management develops these inputs based on the best information available, including their own data.

<29> Financial instruments

Financial instruments primarily consist of cash and cash equivalents, investments, accounts receivable, accounts payable, warrants, convertible notes and short-term borrowings. The carrying value of the Group’s cash and cash equivalents, investments, accounts receivable, accounts payable, convertible notes and short-term borrowings approximate their market values due to the short-term nature of these instruments.

<30> Recent accounting pronouncements

Income Taxes

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Group is currently evaluating the impact of ASU 2019-12 on its financial position, results of operations, and cash flow.

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CONVENIENCE TRANSLATION

12 Months Ended

Dec. 31, 2020

CONVENIENCE TRANSLATION

CONVENIENCE TRANSLATION

3. CONVENIENCE TRANSLATION

The Group, with the exception of its subsidiaries, Red 5, The9 Interactive and Red 5 Singapore, maintains its accounting records and prepares its financial statements in RMB. The U.S. dollar amounts disclosed in the accompanying consolidated financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB6.5250, representing the noon buying rate in New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York, on December 31, 2020. Such translations should not be construed as representations that the RMB amounts represent, or have been or could be converted into, United States dollars at that or any other rate.

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VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2020

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

4. VARIABLE INTEREST ENTITIES

The Group is the primary beneficiary of its VIEs, including Shanghai IT which was designed by the Group to comply with PRC regulations that prohibit direct foreign ownership of businesses that operate online and TV games in the PRC.

Shanghai IT and its VIE subsidiaries

There are certain key contractual arrangements between the Group’s subsidiary, Huiling (wholly-owned foreign enterprise, the "WOFE") and each of the VIEs that provide the Group with control over the VIEs. As a result of these contracts, the Group concluded that it is required to consolidate the VIEs pursuant to the guidance in ASC 810 Consolidation.

A summary of these contractual agreements is as follows:

1) Loan agreement. The WOFE entered into loan agreements with each shareholder of the relevant VIEs. Pursuant to the terms of these loan agreements, the WOFE granted an interest-free loan to each shareholder of the VIEs for the explicit purpose of making a capital contribution to the VIEs. These loans have an unspecified term and will remain outstanding for the shorter of the duration of WOFE or that of the VIE, or until such time that the WOFE elects to terminate the agreement (which is at the WOFE’s sole discretion), at which point the loans are payable on demand. The shareholders of the VIEs may not prepay all or any portion of the loans without the WOFE’s prior written request.

2) Equity pledge agreement. The shareholders of the VIEs entered into equity pledge agreements with the WOFE. Under the equity pledge agreements, the shareholders of the VIEs pledged all of their equity interests in the VIEs to the WOFE as collateral for all of their payments due to the WOFE and to secure performance of all obligations of the VIEs and their shareholders under the above loan agreements. In addition, the dividend distributions to the shareholders of VIEs, if any, will be deposited in an escrow account over which the WOFE has exclusive control. The pledge shall remain effective until all obligations under such agreements have been fully performed. The shareholders have the obligation to maintain ownership and effective control over the pledged equity. Under no circumstances, without the prior written consent of the WOFE, may the shareholder transfer or otherwise encumber any equity interests in the VIEs. If any event of default as provided for therein occurs, the WOFE, as the pledgee, will be entitled to dispose of the pledged equity interests through transfer or assignment and use the proceeds to repay the loans or make other payments due under the above loan agreements up to the loan amounts.

3) Call option agreement. The VIEs and their shareholders entered into equity call option agreements with the WOFE. Pursuant to such agreements, the shareholders of the VIEs grant the WOFE an irrevocable and exclusive option to purchase the shares of VIEs at a purchase price equal to the amount of the registered capital of the VIE or the loan provided by the WOFE, permissible by the then-applicable PRC laws and regulations. WOFE may exercise such right at any time during the term of the agreement. Moreover, under the call option agreements, neither the VIEs nor their shareholders may take actions that could materially affect the VIEs’ assets, liabilities, operations, equity or other legal rights without the prior written approval of the WOFE, including, without limitation, declaration and distribution of dividends and profits; sale, assignment, mortgage or disposition of, or encumbrances on, the VIE’s equity; merger or consolidation; acquisition of and investment in any third-party entities; creation, assumption, guarantee or incurrence of any indebtedness; entering into other materials contracts. The agreements shall not expire until such time as the WOFE acquires all equity interests of the relevant VIEs subject to applicable PRC laws.

4) Shareholder voting proxy agreement. Each of the VIE’s shareholders executed an irrevocable power of proxy to appoint the WOFE as the attorney-in-fact to act on his or her behalf on all matters pertaining to the VIEs and to exercise all of his or her rights as a shareholder of the VIEs, including the right to attend shareholders meetings, to exercise voting rights and to appoint directors, a general manager, and other senior management of the VIEs. The power of proxy is irrevocable and may only be terminated at the discretion of the WOFE.

5) Exclusive technical service agreement. Under the exclusive technical service agreement, the VIEs agreed to engage the WOFE as their exclusive provider of technology consulting and other services for a service fee equal to 90% of all operating profit generated by the VIEs. According to the relevant PRC rules and regulations, related party transactions should be negotiated at the arm’s length basis and apply reasonable transfer pricing methods. The determination of service fees, however, is under the sole discretion of the WOFE. These agreements do not have specific clauses on renewal but do have an initial term of 20 years (with the earliest expiration date being December 31, 2029). By virtue of the governance rights the WOFE maintains over the VIEs, through the terms of the other agreements noted above, the Group is able to unilaterally renew, extend or amend the service agreements at its discretion.

The Group shall be deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:

a. The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and

b. The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

In determining that the Group has "the power to direct the activities of the VIE that most significantly impact the VIEs’ economic performance", the Group looked to the specific provisions of the call option agreement and shareholder voting proxy agreement. These agreements, as summarized above, provide the WOFE effective control over all of the corporate and operating decisions of the VIEs, and as such, the Group’s management concluded that the WOFE has the requisite power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. In assessing the Group’s obligation to absorb losses, the Group notes that it has funded through the loan agreements all of the entities’ share capital and also provides financial support as necessary to the entities through intercompany transactions. The Group’s rights to receive economic benefits that are significant to the VIEs are embodied firstly in the equity pledge agreements that secure the equity owners’ obligations under the relevant agreements, and ascribes to the WOFE all of the economic benefits of the equity interests including rights to any dividends declared. Secondly, the exclusive technical service agreement further secures the ability of WOFE to receive substantially all of the economic benefits from each of the VIEs on behalf of the Group.

In conclusion, because the Group, through its wholly owned subsidiary Huiling, has (1) the power to direct the activities of the VIEs that most significantly affect the VIE’s economic performance, and (2) the right to receive benefits from the VIEs that could potentially be significant to the VIEs, the Group has been deemed to be the primary beneficiary of the VIEs and has consolidated the VIEs since the date of execution of such agreements.

Shareholders of the VIEs may potentially have conflicts of interest with the Company, and they may breach their contracts with the PRC subsidiaries or cause such contracts to be amended in a manner contrary to the interests of the Group. As a result, the Group may have to initiate legal proceedings, which involve significant uncertainty. Such disputes and proceedings may significantly disrupt the Groups business operations and adversely affect the Group’s ability to control the VIEs. As most of the shareholders of the VIEs are directors, officers, shareholders or employees of the Group, management is of the view that the risk that misaligned interests may lead to deconsolidation in the foreseeable future is remote and insignificant.

PRC laws and regulations currently limit foreign ownership of companies that provide Internet content services, which include operating online games. In addition, foreign invested enterprises are currently not eligible to apply for the required licenses to operate online games in the PRC. The9 Limited is incorporated in the Cayman Islands and is considered a foreign entity under PRC laws. Due to restrictions on foreign ownership of companies that provide online games, the Group has entered into contractual arrangements with Shanghai IT to conduct its online games business through its VIEs in the PRC. Shanghai IT holds the necessary licenses and approvals that are essential for the online game business in China. Shanghai IT is principally owned by certain shareholder and employee of the Company. Pursuant to certain other agreements and undertakings, The9 Limited in substance controls Shanghai IT. The Group believes that its current ownership structures and contractual arrangements with Shanghai IT and its equity owners, as well as its operations, are in compliance with all existing PRC laws and regulations. There may, however, be changes and other developments in the PRC laws and regulations or their interpretation. Specifically, following the recent promulgation of the GAPPRFT Circular, it is unclear whether the authorities will deem the Group’s VIE structure and contractual arrangements with Shanghai IT as an “indirect or disguised” way for foreign investors to gain control over or participate in domestic online game operators, and challenge the Group's VIE structure accordingly.

If the Group is found to be in violation of any existing or future PRC laws or regulations, or fails to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including requiring the Group to undergo a costly and disruptive restructuring, such as forcing The9 Limited to transfer its equity interest in the VIEs to a domestic entity or invalidating the VIE agreements. If the PRC government authorities impose penalties which cause the Group to lose its rights to direct the activities of and receive economic benefits from the VIEs, the Group may lose the ability to consolidate and reflect in its financial statements the financial position, and results of operation of the VIEs. The Group, however, does not believe such actions would result in the liquidation or dissolution of the Group, the WOFEs or VIEs.

The aforementioned contractual arrangements with the VIEs and their respective shareholders are subject to risks and uncertainties:

· The VIEs or their shareholders could fail to obtain the proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on the VIEs or the Group mandate a change in ownership structure or operations for the VIEs or the Group, restrict the VIEs or the Group’s use of financing sources, or otherwise restrict the VIEs or the Group’s ability to conduct business.

· The aforementioned contractual agreements may be unenforceable or difficult to enforce. The equity pledge agreements may be deemed improperly registered or the VIEs or the Group may fail to meet other requirements. Even if the agreements are enforceable, they may be difficult to enforce given the uncertainties in the PRC legal system.

· The PRC government may declare the aforementioned contractual agreements invalid. They may modify the relevant regulation, have a different interpretation of such regulations, or otherwise determine that the Group or the VIEs have failed to comply with the legal obligations required to effectuate such contractual arrangements.

· It may be difficult to finance the VIEs by means of loans or capital contributions. Loans from The9 Limited to the VIEs must be approved by the relevant PRC government body and such approval may be difficult or impossible to obtain. The VIEs are domestic PRC enterprises owned by nominee shareholders, thus the Group is not likely to finance activities of the VIEs by means of direct capital contributions.

Summary financial information of the VIE subsidiaries included in the accompanying consolidated financial statements with intercompany balances and transactions eliminated are as follows:

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Total assets	150,615,709	10,357,329	1,587,330
Total liabilities	423,900,573	313,608,879	48,062,664

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Net revenues	16,567,372	182,119	625,488	95,860
Net loss	(49,024,050)	(51,667,515)	(52,410,094)	(8,032,199)

The VIEs contributed an aggregate of 95.0%,  53.3% and 100.0% of the consolidated net revenues for the years ended December 31, 2018, 2019 and 2020, respectively. As of the fiscal years ended December 31, 2019 and 2020, the VIEs accounted for an aggregate of 83.0% and 21.4%, respectively, of the consolidated total assets, and 39.8% and 85.5%, respectively, of the consolidated total liabilities.

The VIE’s assets are not used as collateral for the VIE’s obligations and can only be used to settle the VIE’s obligations.

Relevant PRC laws and regulations restrict the VIE subsidiaries from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and share capital, to the Group in the form of loans and advances or cash dividends. See Note 25 for disclosure of restricted net assets.

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ADVANCES TO SUPPLIERS

12 Months Ended

Dec. 31, 2020

ADVANCES TO SUPPLIERS

ADVANCES TO SUPPLIERS

5. ADVANCES TO SUPPLIERS

Advances to suppliers are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Advance to subscribe tokens	10,094,972	—	—
Advance for minimum guarantee payment	—	—	—
Financing fee	—	—	—
Company registration fee	794,692	—	—
Advertising fee	255,259	—	—
Other	101,685	27,725	4,249
	11,246,608	27,725	4,249

On February 6, 2018, the Group entered into an agreement with a third-party company to subscribe to a total of 5,297,157 tokens for digital assets at a consideration of US$2.0 million and the Group has paid a total of RMB2.1 million (US$0.3 million) for the advance administrative expenses. In July 2019, the Group received an advance of RMB6.9 million (US$1.1 million) from another third-party to transfer approximately 2,222,222 tokens. The Group has provided an impairment loss of RMB6.0 million (US$0.9 million) during the year ended December 31, 2019. In May 2020, the Group received a letter from the token issuer that due to the inability to deliver tokens as scheduled and the issuer had terminated the purchase agreement on April 30, 2020. Upon termination, the issuer is to refund to the participant the net amount and the Group has received a refund of US$0.8 million in July 2020 for the remaining 3,075,035 subscribed tokens. The transfer of tokens to a third-party to transfer of approximately 2,222,222 tokens was completed on the termination date of the purchase agreement. The Group has recognized a gain of RMB2.8 million (US$0.4 million) from the disposal and refund transactions to the subscribed tokens.

In September 2020, the Group entered into a master cooperation and publishing agreement with Voodoo SAS (“Voodoo”), a French game developer and publisher, to cooperate on the publishing and operations of casual games in China for a period of maximum three years upon the launch of the games. In consideration for the exclusive license granted to the Group by Voodoo and as a minimum guarantee payment, the Group should pay Voodoo an aggregate amount of US$13.0 million in cash based on the agreed timetable, including an upfront payment of US$3.0 million that the Group has paid in September 2020. Due to uncertain events to the development and the probability to successfully launch the casual games in the future, the Group has performed an impairment assessment to consider the recoverable amount. As the advance on minimum guarantee payment is non-refundable in nature, the Group has fully impaired the advance paid in 2020.

The Group has obtained financing for the early phase development of CrossFire New Mobile Game from the Inner Mongolia Culture Assets and Equity Exchange. As of December 31, 2020, the Group had paid RMB7.5 million (US$1.1 million) as the financing fee of the total funds raised and to be raised amounting to RMB157.5 million (US$24.1 million). According to the agreement, the Group paid the total financing fee of RMB7.5 million (US$1.1 million) upon receipt of the first payment in October 2016 (see Note 16). Due to unforeseen circumstances, the Group is not planning to finance the remaining RMB100.0 million (US$15.3 million) and due to non-recovery of the advance financing fee, the Group has fully impaired the advance financing fee in 2018.

In total, the Group recorded impairment charges relating to the advances to suppliers and other advances of RMB7.8 million, RMB6.0 million and RMB20.7 million (US$3.2 million) for the years ended December 31, 2018, 2019 and 2020, respectively.

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PREPAYMENTS AND OTHER CURRENT ASSETS, NET

12 Months Ended

Dec. 31, 2020

PREPAYMENTS AND OTHER CURRENT ASSETS, NET

PREPAYMENTS AND OTHER CURRENT ASSETS, NET

6. PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments and other current assets are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Employee advances	1,648,197	2,292,700	351,372
Input VAT recoverable	1,441,700	1,780,484	272,871
Prepayments and deposits	1,488,463	1,551,118	237,719
Refundable withholding tax	1,297,016	—	—
Other receivables, net of allowance for doubtful accounts of  RMB5,343,427 and RMB6,619,312  as of December 31, 2019 and 2020, respectively	2,973,158	4,231,165	648,454
	8,848,534	9,855,467	1,510,416

XML

ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE

12 Months Ended

Dec. 31, 2020

ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE

ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE

7. ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE

On September 26, 2019, the Group entered into an agreement with Kapler Pte. Ltd. to sell three subsidiaries, namely The9 Computer, C9I Shanghai and Shanghai Kaie for total consideration of RMB493.0 million (US$75.6 million). These subsidiaries hold land use rights and office buildings located at Zhangjiang, Shanghai. The sale of three subsidiaries was completed on February 21, 2020 with a gain on disposal amounting to RMB391.8 million (US$60.0 million).

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Assets classified as held-for-sale
Cash and cash equivalents	43,027,475	—	—
Prepayments and other current assets	5,162,857	—	—
Property, equipment and software, net	14,051,044	—	—
Land use rights, net	61,148,974	—	—
Total assets classified as held-for-sale	123,390,350	—	—
Liabilities directly associated with assets held-for-sale
Accounts payable	50,000	—	—
Other taxes payable	1,585,095	—	—
Other payables and accruals	46,800	—	—
Interest payable	11,384,841	—	—
Long-term borrowing due within one year	31,624,560	—	—
Total liabilities directly associated with assets held-for-sale	44,691,296	—	—

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INVESTMENTS

12 Months Ended

Dec. 31, 2020

INVESTMENTS

INVESTMENTS

8. INVESTMENTS

The Group’s investments comprise the following:

				Share
				ownership as of
	December 31,	December 31,	December 31,	December 31,
	2019	2020	2020	2020
	RMB	RMB	US$
			( Note 3)
Investments accounted for under equity method:
ZTE9 Network Technology Co., Ltd., Wuxi (“ZTE9”)	—	—	—	5.00	%
System Link Corporation Limited ("System Link") <1>	—	—	—	—	%
Shanghai Big Data Cultures & Media Co., Ltd. (“Big Data”)	—	—	—	44.46	%
Maxline Holdings Limited (“Maxline”)	—	—	—	29.00	%
Leading Choice Holdings Limited (“Leading Choice”) <4>	—	—	—	—	%
Nanyang Herbs Pte. Ltd. ("Nanyang Herbs") <11>	—	—	—	50.00	%
Investments accounted for under cost method:
Shanghai Institute of Visual Art of Fudan University (“SIVA”) <8>	10,000,000	—	—	1.28	%
T3 Entertainment Co., Ltd. (“T3”) <2>	—	—	—	—	%
Smartposting Co, Ltd. (“Smartposting”)	—	—	—	14.55	%
Beijing Ti Knight Network Technology Co., Ltd. (“Beijing Ti Knight”)	—	—	—	9.90	%
Shanghai The9 Education Technology Co., Ltd. (“The9 Education Technology”)	—	—	—	19.20	%
Shanghai Ronglei Culture Communication Co., Ltd. (“Shanghai Ronglei”) <3>	—	—	—	—	%
Plutux Limited (“Plutux”) <9>	—	—	—	8.00	%
Zhenjiang Kexin Power System Design and Research Co., Ltd. (“Zhenjiang Kexin”) <5>	—	—	—	9.90	%
Shangdong Shanyeyunye Culture Co., Ltd. (“Shanyeyunye”) <6>	—	—	—	10.00	%
Beijing Weiming Naonao Technology Co., Ltd. (“BeijingNaonao”) <7>	—	—	—	9.09	%
FF Intelligent Mobility Global Holdings Ltd. ("FF Intelligent") <10>	—	—	—	0.156	%
Total	10,000,000	—	—

<1> System Link

In December 2019, System Link was dissolved by striking off by the Companies Registry of Hong Kong due to failure to submit annual returns required per laws and regulations.

<2> T3

In July 2019, the Group disposed all of its ordinary shares in T3 to third-parties for a total consideration of KRW6,092.8 million, approximately US$5.2 million, and recorded a gain on disposal of RMB10.4 million (US$1.6 million).

<3> Shanghai Ronglei

In December 2017, the Group entered into an investment agreement with a shareholder of Shanghai Ronglei, where the Group agreed to invest a total of RMB5.0 million (US$0.8 million) in Shanghai Ronglei. As of December 31, 2018, the Group has invested RMB4.0 million (US$0.6 million) but due to weaker than expected operating performance, the investment in Shanghai Ronglei was fully impaired and the impairment of RMB4.0 million (US$0.6 million) was recorded for the year ended December 31, 2018. In June 2019, both the Group and shareholder of Shanghai Ronglei has agreed to terminate the investment agreement and the shareholder of Shanghai Ronglei agreed to repurchase the shares issued to the Group at original cost. The Group disposed of its equity interest in Shanghai Ronglei and received RMB3.0 million (US$0.5 million) for the year ended December 31, 2019.

<4> Leading Choice

In September 2018, the Group completed a share exchange transaction with Leading Choice, which is a private company incorporated under the laws of Hong Kong for issuance and sale of 21,000,000 ordinary shares of the Company with a specific lock-up period. In exchange, the Company obtained 20% equity interest in Leading Choice. The fair value of 20% equity interest in Leading Choice was considered to be the nominal value of ordinary shares of the Group in the nonmonetary exchange transaction. The investment was fully impairment in 2018. In 2020, the Group disposed its 20% equity interest in Leading Choice to a third for a consideration of RMB0.2 million (US$0.03 million) and recorded a gain on disposal of RMB0.2 million (US$0.03 million).

<5> Zhenjiang Kexin

In June 2019, the Group completed a share exchange transaction with Comtec Windpark Renewable (Holdings) Co., Ltd. ("Comtec"), which was a private company incorporated under the laws of British Virgin Islands for issuance and sale of 3,444,882 ordinary shares of the Group. In exchange, Comtec transferred 9.9% equity interest in Zhenjiang Kexin, a company incorporated under the laws of PRC. The fair value of 9.9% equity interest in Zhenjiang Kexin was considered to be the value of the assets surrendered to the Group in the nonmonetary exchange transaction. The investment was fully impairment in 2018.

<6> Shanyeyunye

In June 2020, the Group entered into an investment agreement with third parties to establish Shandong Shanyeyunye. The Group invested a total of RMB5.0 million (US$0.8 million) in Shanyeyunye for an equity interest of 10%. Shanyeyunye is to establish a joint venture with Shandong Dazhong Digital Culture Technology Co., Ltd. to develop and operates chess and card leisure games in the Province of Shandong. Due to level of uncertainty involved to the succeed to develop and launch the game in the future, the Group recorded an impairment loss of RMB5.0 million (US$0.8 million) for the year ended December 31, 2020.

<7> BeijingNaonao

In August 2020, the Group entered into an investment agreement with Beijing Weiming Naonao Technology Co., Ltd. (“Beijing Naonao”), which aims to develop and operate games designed for therapy purposes. The Group invested RMB3.0 million (US$0.5 million) in Beijing Naonao for an equity interest of 9.09%. Due to level of uncertainty involved to succeed to develop and launch the game in the future, the Group recorded an impairment loss of RMB3.0 million (US$0.5 million) for the year ended December 31, 2020. 

<8> SIVA

In 2020, the Group considered to dispose its investment in SIVA and has performed an impairment assessment to consider the recoverable amount of the investment. The Group recorded an impairment loss of RMB10.0 million (US$1.5 million) for the year ended December 31, 2020.

<9> Plutux

In September 2018, the Group completed a share exchange transaction with Plutux Labs Limited (“Plutux Labs”), which was a private company incorporated under the laws of Cayman Islands for issuance and sale of 21,000,000 ordinary shares of the Company with a specific lock-up period. In exchange, Plutux Labs transferred 8% equity interest in Plutux, a wholly-owned subsidiary of Plutux Labs. The fair value of 8% equity interest in Plutux was considered to be the nominal value of ordinary shares of the Group in the nonmonetary exchange transaction. In 2018, due to weaker than expected operating performance of Plutux, the Group recorded a full impairment loss of RMB1.4 million (US$0.2 million). Cyrus Jun-Ming Wen is a director of Plutux Labs according to the Schedule 13G filed by Plutux Labs on September 13, 2018. According to the Schedule 13D filed by Splendid Days Limited (“Splendid Days”), the Group’s convertible notes investor (see Note 19), on February 21, 2019, Cyrus Jun-Ming Wen is also a director of Truth Beauty Limited (“Truth Beauty”), the shareholder of Splendid Days. Truth Beauty has sold to the Group’s former president 100% of the issued and outstanding share capital of Splendid Days on April 9, 2020.

<10> FF Intelligent (formerly known as Smart King Limited)

In March 2019, the Group entered into a joint venture agreement with Faraday & Future Inc. (“F&F”) in an attempt to enter into electric vehicle business. In April 2019, the Group paid an initial deposit of US$5.0 million to F&F through an interest-free loan from Ark Pacific Associates Limited (“Ark Pacific Associates”), an entity affiliated with the Group’s former president. In November 2020, the Group converted the initial deposit of US$5.0 million into 2,994,011 Class B ordinary shares of FF Intelligent, the holding company of F&F that operates its electric vehicles business, at a pre-agreed conversion price set forth in the joint venture agreement. As a result of this conversion, the capital commitment in the joint venture agreement was deemed released. As the prepaid deposit for joint venture was fully impaired in 2019 as actual progress on the joint venture was below expectations. The initial recognition for the investment in FF Intelligent is recorded at nil.

<11> Nanyang Herbs

In February 2020, the Group entrusted a nominee to hold trust shares of 50% in Nanyang Herbs and the nominee is to exercise rights in accordance with the instruction of the Group. In March 2020, Nanyang Herbs entered into a research collaboration agreement with Nanyang Technological University (“NTU”) to jointly provide technology and financial support to fund the research project to embark on evidence-based study to illustrate the medicinal values and efficacies of certain herbs. The Group has invested an amount of RMB3.3 million (US$0.5 million) to Nanyang Herbs in 2020. As the result of the first phase research project below expectation, the Group recorded an impairment loss of RMB1.2 million (US$0.2 million) for the year ended December 31, 2020.

For the investments in equity, the Group has recorded share of loss of RMB4.3 million, RMB2.8 million and RMB2.2 million (US$0.3 million) for the years ended December 31, 2018, 2019 and 2020, respectively.

In total, the Group recorded impairment charges relating to its investments in equity and other of RMB9.2 million, RMB8.5 million and RMB19.2 million (US$2.9 million) for the years ended December 31, 2018, 2019 and 2020, respectively.

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PROPERTY, EQUIPMENT AND SOFTWARE, NET

12 Months Ended

Dec. 31, 2020

PROPERTY, EQUIPMENT AND SOFTWARE, NET

PROPERTY, EQUIPMENT AND SOFTWARE, NET

9. PROPERTY, EQUIPMENT AND SOFTWARE, NET

Property, equipment and software and related accumulated depreciation and amortization are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Office buildings	69,341,652	—	—
Computers and equipment	5,181,577	4,989,121	764,616
Leasehold improvements	9,359,857	—	—
Office furniture and fixtures	1,787,549	1,720,139	263,623
Motor vehicles	5,031,201	4,376,821	670,777
Software	14,542,095	10,511,865	1,611,014
Less: accumulated depreciation and amortization	(89,974,366)	(20,620,844)	(3,160,283)
Less: property, equipment and software, net, held-for-sale	(14,051,044)	—	—
Net book value	1,218,521	977,102	149,747

Depreciation and amortization charges for the years ended December 31, 2018, 2019 and 2020 amounting to RMB3.7 million, RMB2.8 million and RMB0.4 million (US$0.1 million), respectively. The Group has recorded a gain on disposal of property, equipment and software amounting to RMB0.2 million, RMB2.2 million, RMB0.03 million (US$0.01 million),  as other income, net for the years ended December 31, 2018, 2019 and 2020. The office buildings and leasehold improvements of the Group were related to mortgaged properties and the subsidiaries that held the mortgaged properties have been disposed in February 2020 (see Note 7).

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LAND USE RIGHT, NET

12 Months Ended

Dec. 31, 2020

LAND USE RIGHT, NET

LAND USE RIGHT, NET

10. LAND USE RIGHTS, NET

Gross carrying amount, accumulated amortization and net book value of land use rights are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Land use rights	85,160,348	—	—
Less: accumulated amortization	(24,011,374)	—	—
Less: land use right, net, held-for-sale	(61,148,974)	—	—
Net book value	—	—	—

Amortization charge for the years ended December 31, 2018, 2019 and 2020 amounting to RMB1.9 million, RMB1.4 million and nil, respectively.

Land use rights classified as held-for-sale represented land use rights held by The9 Computer, C9I Shanghai and Shanghai Kaie in relation to the office buildings located at Zhangjiang, Shanghai and these subsidiaries were disposed in February 2020 (see Note 7).

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LEASES

12 Months Ended

Dec. 31, 2020

LEASES

LEASES

11. LEASES

The Group has operating leases primarily for office space, parking lots and warehouse after relocation of their principal office since August 2019. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the lease payments over the lease term at commencement date.

As the leases do not provide an implicit rate, an incremental borrowing rate is used based on the information available at commencement date, to determine the present value of lease payments. The incremental borrowing rates approximate the rate the Group would pay to borrow in the currency of the lease payments for the weighted-average life of the lease.

The operating lease ROU assets also include any lease payments made prior to lease commencement and excludes lease incentives and initial direct costs incurred if any. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Operating lease costs are recognized on a straight-line basis over the lease term. The prepaid rental expense recorded in operating lease right-of-use assets amounting to RMB0.01 million and nil as of December 31, 2019 and 2020, respectively.

The items related to operating lease in the consolidated balance sheets are summarized below:

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Operating lease right-of-use assets	9,257,604	5,149,090	789,133
Operating lease liabilities-current portion	3,407,670	3,787,210	580,415
Operating lease liabilities-non-current portion	6,251,705	2,464,495	377,700

Lease cost recognized in the Group’s consolidated statements of operations and comprehensive loss is summarized as follows:

	Classification in Consolidated
	Statements of Operations
	and Comprehensive (Loss) Gain	December 31, 2019	December 31, 2020	December 31, 2020
		RMB	RMB	US$
				(Note 3)
Operating lease cost	Operating expenses	1,606,340	3,539,374	542,433
Cost of other leases with terms less than one year	Operating expenses	82,232	67,281	10,311
Total		1,688,572	3,606,655	552,744

Maturities of operating lease liabilities are as follows:

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Due within one year	3,779,845	3,995,768	612,378
Due in the second year	3,995,768	2,502,839	383,577
Due in the third year	2,502,839	—	—
Total lease payments	10,278,452	6,498,607	995,955
Less: imputed interest	(619,077)	(246,902)	(37,839)
Total	9,659,375	6,251,705	958,116

As of December 31, 2020, the Group does not have significant operating or finance leases that have not yet commenced. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Supplemental cash flow information related to operating leases is as follows:

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Cash paid for amounts included in the measurement of operating lease liabilities	1,271,769	2,842,464	435,627

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OTHER LONG-LIVED ASSETS, NET

12 Months Ended

Dec. 31, 2020

OTHER LONG-LIVED ASSETS, NET

OTHER LONG-LIVED ASSETS, NET

12. OTHER LONG-LIVED ASSETS, NET

Other long-lived assets are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Prepaid license fee	6,515,200	—	—
Prepaid deposit for joint venture	—	—	—
Total	6,515,200	—	—

Prepaid license fee represents the payment made by the Group pursuant to an IP license agreement on CrossFire New Mobile Game with an online game company in January 2016 to use its IP to develop a mobile game for a period of two years after commercialization of the game. The contract is effective through October 31, 2020 and the IP license expired as of December 31, 2020. There was no substantial development on CrossFire New Mobile Game in 2020 and both the Group and the third-party outsourced development company are waiting for the approval from relevant authorities for commercial launch.

The Group is in the process of negotiating with the online game company to regain the license for such game development. Considered the game was failed to launch prior to the expiry date and the level of uncertainty involved to regain the license or to commercially launch the game in the future, the Group has performed an impairment assessment to consider the recoverable amount. As the prepaid license fee is non-refundable in nature, the Group has fully impaired the prepaid license fee of RMB6.5 million (US$1.0 million) during the year ended December 31, 2020.

In March 2019, the Group entered into a joint venture agreement with F&F in an attempt to enter the electric vehicle business. The Group paid an initial deposit of US$5.0 million to F&F through an interest-free loan from Ark Pacific Associates in April 2019. In 2019, as the actual progress of the joint venture is below expectations, the Group recorded a full impairment loss of RMB34.9 million (US$5.3 million) for the year ended December 31, 2019 (see Note 29.1).

In November 2020, the Group converted the initial deposit of US$5.0 million into 2,994,011 Class B ordinary shares of FF Intelligent, the holding company of F&F that operates its electric vehicles business, at a pre-agreed conversion price set forth in the joint venture agreement (see Note 8 <10>).

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2020

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

13. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of common stock warrants was measured using the Black-Scholes Model. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liability are the fair value of the underlying stock at the valuation date and the estimated term of the warrants. The fair value of convertible note is based on a discounted cash flow model with an unobservable input of discount rate. (Level 3)

In 2015, the Group issued warrants in connection with its convertible notes has the warrants have expired as of December 31, 2020. The warrants are recorded at fair market value at the date of issuance and subsequently at each reporting date. The following table presents the change in the warrants liability that were measured at fair value on a recurring basis using significant Level 3 inputs during 2019 and 2020 (see Note 19).

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Balance at beginning of year	1,490,844	198,600	30,437
Issuance of warrants	—	1,694,208	259,649
Fair value change on warrants liability recognized in other comprehensive income	(1,292,244)	(37,851)	(5,801)
Balance at the end of the year	198,600	1,854,957	284,285

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TAXATION

12 Months Ended

Dec. 31, 2020

TAXATION

TAXATION

14. TAXATION

Cayman Islands

Under the current tax laws of the Cayman Islands, the Group is not subject to tax on its income or capital gains. In addition, upon payment of dividends by The9 Limited to its shareholders, no Cayman Islands withholding tax will be imposed.

Hong Kong

The Group’s subsidiaries incorporated in Hong Kong did not have assessable profits that were derived in Hong Kong during the years ended December 31, 2018, 2019 and 2020. Therefore, no Hong Kong income tax has been provided for in the years presented.

Singapore

The Group’s subsidiaries incorporated in Singapore did not have assessable profits that were derived in Singapore during the years ended December 31, 2018, 2019 and 2020. Therefore, no Singapore income tax has been provided for in the years presented.

PRC

The Group’s subsidiaries and VIE subsidiaries incorporated in the PRC are subject to Enterprise Income Tax (“EIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the PRC Enterprise Income Tax Law (“EIT Law”), which went into effect as of January 1, 2008. The Group’s subsidiaries and VIE subsidiaries in the PRC are generally subject to EIT at a statutory rate of 25%. The subsidiaries that hold a “High and New Technology Enterprise” (“HNTE”) qualification are subject to a 15% preferential EIT rate. The HNTE qualification is valid for three years and every qualified HNTE company is required to re-apply for it in the three years after receiving approval. In October 2017, Shanghai IT renewed its HNTE qualification and obtained approval in 2018, which entitles Shanghai IT to enjoy a preferential EIT rate of 15% during the period from 2018 to 2020. As HNTE qualification has expired in November 2020, Shanghai IT is no longer entitles the HNTE qualification benefits. As Shanghai IT did not have taxable income for the years ended December 31, 2018, 2019 and 2020, Shanghai IT has not benefited from this preferential income tax rate.

United States

The Group’s subsidiaries incorporated in the U.S. are registered in the state of California and are subject to U.S. federal corporate marginal income tax rate of 21% and state income tax rate of 0.28%, respectively.

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act includes significant changes to the U.S. corporate income tax system including a federal corporate rate reduction from 34% to 21%; limitations on the deductibility of interest expense and executive compensation; creation of the base erosion anti-abuse tax (“BEAT”), a new minimum tax; and the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system. A majority of the provisions in the Tax Act are effective January 1, 2018.

The Tax Act creates a new requirement that certain income such as Global Intangible Low-Taxed Income (“GILTI”) earned by a controlled foreign corporation (“CFC”) must be included in the gross income of the CFC U.S. shareholder. The Group has evaluated these provisions of the Tax Act and whether taxes due on future U.S. inclusions related to GILTI be recorded as current-period expense when incurred, or factored into measurement of deferred taxes. The Group concluded that the Tax Act had no material effect to the financial statements.

Composition of income tax expense

The current and deferred portions of income tax expense included in the consolidated statements of operations and comprehensive loss are as follows:

	For the year ended December 31,
	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Current income tax expense
PRC	—	—	7,165,097	1,098,099
Other jurisdictions	—	—	—	—
Deferred tax assets
PRC	(39,763,083)	(5,772,005)	25,905,564	3,970,201
Other jurisdictions	(19,816,235)	(15,151,553)	(44,312,311)	(6,791,159)
Subtotal	(59,579,318)	(20,923,558)	(18,406,747)	(2,820,958)
Change in valuation allowance
PRC	39,763,083	5,772,005	(25,905,564)	(3,970,201)
Other jurisdictions	19,816,235	15,151,553	44,312,311	6,791,159
Subtotal	59,579,318	20,923,558	18,406,747	2,820,958
Income tax expense	—	—	7,165,097	1,098,099

Reconciliation of the differences between statutory tax rate and the effective tax rate

Reconciliation  between the statutory EIT rate and the Group’s effective tax rate is as follows:

	For the year ended		For the year ended		For the year ended
	December 31,		December 31,		December 31,
	2018		2019		2020
PRC statutory EIT rate	25	%	25	%	25	%
Effect of different tax rates in other jurisdictions	2	%	1	%	(10)	%
Change in future tax rate (upon expiration of preferential rate)	1	%	2	%	—	%
Change of prior year deferred tax assets	(11)	%	(15)	%	1	%
Change of valuation allowance	(2)	%	(18)	%	(10)	%
Income not subject to tax and non-deductible expenses, net	—	%	—	%	—	%
Effect of expired net operating loss	(15)	%	5	%	(6)	%
PRC withholding tax	—	%	—	%	2	%
Effective EIT rate	—	%	—	%	2	%

Significant components of deferred tax assets

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Temporary differences related to expenses and accruals	1,076,708	615,041	94,259
Temporary differences related to impairment on advances to suppliers	3,438,597	2,942,771	450,999
Temporary differences related to provision for doubtful accounts	1,078,742	689,811	105,718
Others	8,771,868	8,221,500	1,260,000
Temporary differences related to depreciation, amortization, and impairment of equipment and intangible assets	24,890,416	15,396,549	2,359,624
Startup expenses and advertising fees	199,704	212,880	32,625
Temporary differences related to research and development credits	1,120,850	1,057,050	162,000
Temporary differences related to equity investments	5,069,035	11,740,058	1,799,243
Foreign tax credits	—	—	—
Temporary differences related to provision for prepayment for equipment	5,000,000	5,000,000	766,284
Tax loss carry forwards	270,594,922	256,958,435	39,380,603
Total deferred tax assets	321,240,842	302,834,095	46,411,355
Less: Valuation allowance	(321,240,842)	(302,834,095)	(46,411,355)
Total deferred tax assets	—	—	—

Movement of valuation allowance on deferred tax assets

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Beginning balance	342,164,400	321,240,842	49,232,313
Decrease in valuation allowance	(20,923,558)	(18,406,747)	(2,820,958)
Ending balance	321,240,842	302,834,095	46,411,355

For the years ended December 31, 2019 and 2020, the Group recorded a reversal of valuation allowance of approximately RMB20.9 million and an increase of RMB18.4 million (US$2.8 million), respectively. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Group’s experience with tax attributes expiring as unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law.

As of December 31, 2020, the Group’s PRC subsidiaries had net operating loss carry forwards amounting to RMB 327.8 million which will expire from 2021 to 2025. The Group has provided a full valuation allowance as it is not more likely than not that the net operating losses can be utilized before expiry. According to Caishui [2018] No. 76, with effect from January 1, 2018, losses of qualified HNTE in the current year occurred five years before the year in which the entity qualified for HNTE and have not been made up shall be allowed to be carried forward to subsequent years to be made up, and the maximum carry-forward period shall be extended from five years to ten years.

As of December 31, 2020, Red 5 had net operating loss carry forwards for federal and state income tax purposes of approximately US$127.2 million and US$68.4 million, respectively, which will begin to expire in 2029 and 2019, respectively. Red 5 also had credits for increasing research activities available to offset future federal and state taxes payable of approximately US$0.1 million and US$0.1 million, respectively, that will begin to expire in 2030 for federal purposes and which have no expiration for state purposes. Red 5 had foreign tax credits for federal purposes of approximately US$2.5 million, which expired in 2020. Pursuant to US tax laws and regulations, the utilization of an acquired entity’s net operating losses and credits are subject to annual limitation computed based on the fair value of the acquired entity. As a result of the limitation, the Group provided a full valuation allowance on its deferred tax assets as it is not more likely than not that the net operating losses and credits carried forward can be utilized before expiration.

In accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises (“FIEs”) earned after January 1, 2008, are subject to a 10% withholding income tax. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate is reduced to 5%, if the investor holds at least 25% in the FIE, or 10%, if the investor holds less than 25% in the FIE. A deferred tax liability should be recognized for the undistributed profits of PRC companies unless the Group has sufficient evidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. The Group plans to indefinitely reinvest undistributed profits earned after December 31, 2007 from its PRC subsidiaries with operations in the PRC. Therefore, no withholding income taxes for undistributed profits of the Company’s subsidiaries established in PRC have been provided as of December 31, 2019 and 2020.

Under applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Group has not recorded any such deferred tax liability attributable to the undistributed earnings of its financial interests in VIEs because these VIEs do not have any accumulated earnings as of December 31, 2019 and 2020.

The Group made its assessment of the level of authority for each tax position (including the potential application of interests and penalties) based on the tax positions’ technical merits, and measured the unrecognized benefits associated with the tax positions. The Group did not have any unrecognized tax benefits as of December 31, 2019 and 2020. The Group does not anticipate that unrecognized tax benefits will significantly increase or decrease within the next twelve months. For the years ended December 31, 2018, 2019 and 2020, the Group did not have any material interest and penalties associated with its tax positions.

According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From inception to 2019, the Group is subject to examination by the PRC tax authorities. Red 5’s U.S. federal income tax returns and state income tax returns for 2015 through 2019 are open tax years, subject to examination by the relevant tax authorities.

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SHORT-TERM BORROWINGS

12 Months Ended

Dec. 31, 2020

SHORT-TERM BORROWINGS

SHORT-TERM BORROWINGS

15. SHORT-TERM BORROWINGS

Short-term borrowings are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Pledged loan	82,645,089	—	—
Interest-free loan	34,881,000	—	—
Long-term borrowing due within one year	31,624,560	—	—
Less: borrowing classified as held for sale	(31,624,560)	—	—
Total	117,526,089	—	—

In June 2016, Asian Development borrowed a total of HK$92.3 million from a financial services company at an annual interest rate of 2% for a term of 24 months, which is secured by a pledge of 417,440,000 shares of L&A. The pledged loan was due in June 2018 as Asian Development has defaulted the loan in June 2016 due to a sharp decline in share price of L&A (see Note 29.2). On September 9, 2020, the High Court of Hong Kong issued an order to wind-up Asian Development given its inability to repay its liabilities and provisional liquidator to On September 9, 2020, the provisional liquidator of Asian Development made a winding-up order and the High Court of Hong Kong gazetted this order on September 18, 2020. The Official Receiver’s Office of Hong Kong has appointed a liquidator to perform the work and duties to the winding-up of Asian Development, including the prosecution of insolvency offences and disqualification of directors. Followed by the winding-up order issued by the court, the Group has lost control of Asian Development and deconsolidated Asian Development as of the date of the court order. The obligation for the payment of pledged loan remained with Asian Development as it is a limited liability company and the Group has recognized an amount of RMB83.7 million (US$12.8 million) to the gain on disposal of Asian Development.

In December 2015, the Group entered an entrusted bank borrowing agreement, amounted to RMB31.6 million (US$4.8 million), with a subsidiary of Splendid Days and China Merchants Bank as entrustment bank. Both the principal and interest of the entrusted bank loan were repaid on February 11, 2020.

In March 2019, the Group entered into a joint venture agreement with F&F, to establish a joint venture in China to manufacture and distribute electric vehicles designed and developed by F&F with a committed capital investment amounting to US$600.0 million. The Group made the initial deposit of US$5.0 million to F&F in April 2019 through an interest-free loan granted from Ark Pacific Associates for a period of one year. The loan was due on March 31, 2020 and the loan was waived by Ark Pacific Associates followed by a private settlement deed entered among the Group, Splendid Days and Ark Pacific Associates where upon the settlement of the convertible notes and the satisfaction of the conditions set forth in the private settlement deed, the interest-free loan will be waived. As of December 31, 2020, the Group has fulfilled the obligation stated in the private settlement deed and the interest-free loan was waived.

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

16. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Funds raised for CrossFire New Mobile Game	57,499,910	56,311,274	8,630,080
Professional services	11,844,738	9,866,284	1,512,074
Agency commission fees payable	—	6,397,096	980,398
Staff cost related payables	9,851,024	3,842,856	588,943
Office expenses	3,543,495	1,920,735	294,365
Product development services	906,906	848,237	129,998
Other payables	3,540,000	—	—
Utility fees	1,646,394	—	—
Others	4,308,376	4,384,391	671,937
Total	93,140,843	83,570,873	12,807,795

The Group has financed the early phase development of CrossFire New Mobile Game through fundraising from the Inner Mongolia Culture Assets and Equity Exchange. As of December 31, 2020, the Group had raised RMB57.5 million (US$8.8 million). The Group does not plan to finance the remaining RMB100.0 million (US$15.3 million) from the planned fundraising arrangement, and due to non-recovery of the advance financing fee, the Group fully impaired the advance financing  fee in 2018.

In April 2020, Inner Mongolia Culture Assets and Equity Exchange filed a civil claim against the Group to recover RMB57.5 million (US$8.8 million) of principal and RMB4.6 million (US$0.7 million) of interest that the Group has previously raised to finance the early phase development of CrossFire New Mobile Game. The Group cooperated with a third-party company for development and operation of CrossFire New Mobile Game and plan to apply for the requisite license from GAPPRPT for CrossFire New Mobile Game as soon as development of the game is finalized to launch the game. In October 2020, Intermediate Court of Changsha City, Hunan Province issued a decision to reject all claims against the Group. As of December 31, 2020, no appeal claim has been made by Inner Mongolia Culture Assets to the sentence of the court.

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Refund of WoW game points

12 Months Ended

Dec. 31, 2020

Refund of WoW game points

Refund of WoW game points

17. Refund of WoW game points

As a result of the loss of the World of Warcraft (“WoW”) license on June 7, 2009, the Group announced a refund plan in connection with inactivated WoW game point cards, which the Group recorded as refund of game points. According to the plan, inactivated WoW game point card holders are eligible to receive a cash refund from the Group. The Group recorded a liability in connection with both inactivated points cards and activated but unconsumed point cards of approximately RMB200.4 million (US$30.7 million).

Upon the loss of the WoW license, the Group concluded the nature of the obligation substantively changed from deferred revenue, for which the Group had the responsibility to satisfy the underlying performance obligation, to an obligation to refund players for their unconsumed points. The Group has accounted for this refund liability by applying the derecognition guidance specified in ASC 405‑20. In accordance with this guidance, the refund liability associated with these WoW game points, to the extent not refunded, will be recorded as other operating income after the Group is legally released from the obligation to refund amounts under the applicable laws. In consultation with its legal counsel, the Group concluded the legal liability relating to the inactivated WoW game point cards was extinguished in September 2011 on the basis that the legal liability lapsed two years from the date the Group publicly announced the refund policy that applied to these cards. Accordingly, the associated liability amounting to RMB26.0 million (US$4.0 million) was recognized as other operating income for the year ended December 31, 2011. With respect to the remaining refund liability, based on current PRC laws, to the extent not refunded, the Company, in consultation with legal counsel, has determined that it will be legally released from this liability in September 2029, which represents 20 years from the discontinuation of WoW in 2009. However, if the Group were to publicly announce a refund policy, the Group would be legally released from any remaining liability for these activated, but unconsumed points that remained two years from the date of such announcement. To date, the Group has determined not to publicly announce any refund policy with respect to this remaining liability, and no refunds have been claimed. The remaining refund liability relating to the activated, but unconsumed WoW game points is RMB170.0 million (US$26.1 million) as of both December 31, 2019 and 2020.

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CONVERTIBLE NOTES

12 Months Ended

Dec. 31, 2020

CONVERTIBLE NOTES

CONVERTIBLE NOTES

18. CONVERTIBLE NOTES

On November 24, 2015, the Group entered into an agreement with Splendid Days for a private placement of secured convertible notes and warrants for gross proceeds of US$40,050,000. The transaction closed on December 11, 2015 and the Group has recognized an amount of US$8.1 million as BCF from the convertible notes. Pursuant to the terms of the agreement, the convertible notes shall mature in December 2018, subject to an extension for two years at the discretion of the investor. The convertible notes accrue interest at a rate of 12% per annum and are payable upon maturity of the notes. According to the Schedule 13D filed by Splendid Days on March 5, 2018, Splendid Days’s equity was transferred from Ark Pacific Special Opportunities Fund I, L.P., an entity affiliated with the Group's former president to Truth Beauty Limited. The equity of Splendid Days was transferred to the Group’s former president on April 9, 2020. The notes are secured by the equity interest of the Group’s subsidiaries (The9 Computer and C9I Shanghai), and the Group’s office buildings. Splendid Days is entitled to put the convertible notes to the Group upon a change in control and upon an event of default. The Group has entered into a deed of settlement with the Splendid Days on March 12, 2019 wherein the Group will proceed to dispose of office buildings and use the proceeds to repay both convertible notes and the entrusted bank loan. Annual interest rate on the loan remained at 12% up to settlement date. In September 2019, the Group entered into an agreement with Kapler Pte. Ltd. to sell three subsidiaries, namely The9 Computer, C9I Shanghai and Shanghai Kaie for total consideration of RMB493.0 million (US$75.6 million).

These subsidiaries hold land use rights and office buildings located at Zhangjiang, Shanghai. The transaction was completed on February 21, 2020.

On May 29, 2020, the Group entered into a private settlement deed with Splendid Days and Ark Pacific Associates relating to the convertible notes repayment. Pursuant to the private settlement deed, the interest rate on the convertible notes was retrospectively lowered from 12% to 7% per annum for the period commencing from the original convertible notes issuance date until February 21, 2020, the date on which interest stopped to accrue on the convertible notes. The Group settled approximately US$50.0 million of the total outstanding amount due to Splendid Days and its designated affiliates primarily relating to convertible notes and entrusted loan in aggregate by cash and further settled the remaining portion on June 12, 2020 by an initial issuance of 32,400,000 Class A ordinary shares of the Company to Splendid Days. Those Class A ordinary shares are subject to certain lock-up conditions and the number of Class A ordinary shares held or to be held by Splendid Days may also be subject to quantitative adjustments based on the market value of the Company’s shares, as set forth in the private settlement deed. For the extinguishment of the convertible notes, the intrinsic value of the BCF as of extinguishment date was determined as nil and all the reacquisition price allocated to the convertible notes. In accordance with the terms and conditions set forth in the private settlement deed, the interest-free loan of US$5.0 million extended by Ark Pacific Associates was waived in December 2020 given the conditions set forth have been satisfied. As of December 31, 2020, the Group deemed there is no quantitative adjustments required to the number of Class A ordinary shares issued to Splendid Days in June 2020. The Group recognized a gain on extinguishment on convertible notes amounting to RMB56.8 million (US$8.7 million) for the year ended December 31, 2020.

On February 3, 2020, the Group entered into a convertible promissory note with Iliad Research and Trading, L.P., for convertible notes of US$500,000 with interest at a rate of 6% per annum. The convertible note was repaid in October 2020 and no gain or loss on extinguishment.

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WARRANTS

12 Months Ended

Dec. 31, 2020

WARRANTS

WARRANTS

19. WARRANTS

The warrants on convertible notes are exercisable at any time after the commitment date to purchase up to 4,778,846 shares of the Company’s ADS as follows:

Warrants	Principal Amount		Exercise Price
Tranche I	US$	5,000,000	US$	1.50
Tranche A	US$	2,750,000	US$	2.60
Tranche B	US$	1,650,000	US$	5.20
Tranche C	US$	550,000	US$	7.80

For the tranches A, B and C, the expiration date is the third anniversary of the issuance date or if the holder has exercised its option to extend the maturity date of all or any portion of the convertible notes in accordance with the terms and conditions thereof, the fifth anniversary of the issuance date. Tranches A, B and C expired on December 20, 2018. Tranche I expired in December 2020. The holder of the warrants did not exercise until the expiration date.

The fair value of the warrants as of December 31, 2019 and 2020 is RMB0.2 million and nil, respectively. The change in fair value of the warrants liability resulted in a loss of RMB2.3 million, RMB1.3 million and RMB0.2 million (US$0.03 million) for the years ended December 31, 2018, 2019 and 2020, respectively.

In October 2020, the Group has completed an offering for the issuance of ordinary shares, warrants and representative’s warrants. The warrants on equity-linked instruments are classified as equity, these warrants are exercisable immediately after the issuance date to purchase up to 2,702,500 of the Company’s ADSs and expire three years after the issuance date. The representative’s warrants are classified as a liability, these warrants exercisable commencing six months from the effective date of the registration statement and expire three years after the effective date.

No remeasurement to the equity classified warrants after initial recognition and the Group will reassess the classification on each reporting date. For the liability classified warrants, the fair value of the warrants as of issuance date and December 31, 2020 is RMB1.7 million (US$0.3 million) and RMB1.9 million (US$0.3 million), respectively. The change in fair value of the warrants liability resulted in a gain of RMB0.2 million (US$0.02 million) for the year ended December 31, 2020.

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SHAREHOLDER RIGHTS PLAN

12 Months Ended

Dec. 31, 2020

SHAREHOLDER RIGHTS PLAN

SHAREHOLDER RIGHTS PLAN

20. SHAREHOLDER RIGHTS PLAN

On January 8, 2009, the Company adopted a shareholder rights plan. The shareholder rights plan is designed to protect the best interests of the Company and its shareholders by discouraging third-parties from seeking to obtain control of the Company in a tender offer or similar hostile transaction. The shareholder rights plan was amended on March 9, 2009, June 8, 2017, and June 16, 2017.

Pursuant to the terms of the shareholder rights plan, as amended, one right was distributed with respect to each ordinary share of the Company outstanding at the close of business on January 22, 2009. The rights will become exercisable only if a person or group (the “Acquiring Person”) obtains ownership of 15% or more of the Company’s voting securities (including by acquisition of the Company’s ADSs representing ordinary shares) (a “Triggering Event”), subject to certain exceptions. In the case of a Triggering Event, the rights plan entitles shareholders other than the Acquiring Person to purchase, for an exercise price of US$19.50, a number of shares with a value twice that of the exercise price. The number of shares each such shareholder will be entitled to purchase is equal to the product of (i) the number of shares then owned by such shareholder and (ii) two times the exercise price divided by the then current market price per share.

The rights plan expired on January 8, 2019. The plan has not been exercisable as of the expiration date and has not been extended.

On May 6, 2019, an extraordinary general meeting was held to adjust the authorized share capital and to adopt a dual-class share structure, consisting of Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share is entitled to one vote per share on all matters subject to vote at general meetings of the Group. Each Class B ordinary share is entitled to fifty (50) votes per share on all matters subject to vote at general meetings of the Group. Class A ordinary shares and Class B ordinary shares were split from the ordinary shares issued at the time of change. No new shares were issued. Only Mr. Jun Zhu and Incsight Limited (“Incsight”) hold Class B ordinary shares. As of December 31, 2020, there were 260,032,362 ordinary shares issued or outstanding, being the sum of 247,090,351 Class A ordinary shares and 12,942,011 Class B ordinary shares.

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EMPLOYEE BENEFITS

12 Months Ended

Dec. 31, 2020

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

21. EMPLOYEE BENEFITS

Full-time employees of the Group’s subsidiaries and VIE subsidiaries registered in the PRC are entitled to statutory staff welfare benefits, including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. These subsidiaries and VIE subsidiaries are required to accrue for these benefits based on certain percentages of the employees’ salaries in accordance with the relevant regulations, and to make contributions to the state-sponsored pension and medical plans out of the amounts accrued for medical and pension benefits. The total amounts charged to the consolidated statements of operations and comprehensive gain (loss) for such employee benefits amounted to RMB7.9 million, RMB4.5 million and RMB1.2 million (US$0.2 million) for the years ended December 31, 2018, 2019 and 2020, respectively. The PRC government is responsible for the medical benefits and ultimate pension liability to these employees.

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SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

22. SHARE-BASED COMPENSATION

22.1 Share Option Plan

On December 15, 2004, in connection with its initial public offering, the Company adopted a share option plan (“2004 Option Plan”). As of December 31, 2013, the total number of ordinary shares reserved in the 2004 Option Plan was 6,449,614 shares. The maximum contractual term of the awards under this plan shall be no more than five years from the date of grant. The options granted under this plan shall be at the money on the date of grant and typically vest over a three-year period, with one third of the options to vest on the each of the anniversary after the grant date. The 2004 Option Plan was amended in November 2015 to increase the maximum aggregate number of ordinary shares to 14,449,614 shares. The 2004 Option Plan was amended in August 2016 to increase the maximum aggregate number of ordinary shares to 34,449,614 shares. On June 6, 2017, the Group and optionees have entered into certain stock option agreements, pursuant to which the Group has granted to the optionees options to acquire the ordinary shares, par value US$0.01 each, of the Group. According to the agreements, 6,328,535 options were exercised to ordinary shares, and 10,806,665 options were canceled. In December 2018, the 2004 Option Plan was amended to increase the maximum aggregate number of ordinary shares to 100,000,000 shares. As of December 31, 2020, options to purchase 50,000 ordinary shares were outstanding and options to purchase 33,352,118 ordinary shares were available for future grant under the 2004 Option Plan.

Stock Options

The following table summarizes the Group’s share option activities with its employees and directors:

				Weighted-Average
				Remaining
	Number of	Weighted-Average		Contractual Term	Aggregate
	Options	Exercise Price		(years)	Intrinsic Value
Outstanding as of January 1, 2020	50,000	US$	0.93	3.07	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	—		—	—	Nil
Outstanding as of December 31, 2020	50,000	US$	0.93	2.07	Nil
Vested and expected to vest as of December 31, 2020	50,000	US$	0.93	2.07	Nil
Exercisable as of December 31, 2020	50,000	US$	0.93	2.07	Nil

The options expected to vest are estimated by applying the pre-vesting forfeiture rate assumptions to total unvested options. The total intrinsic value of options exercised during the year was nil for years ended December 31, 2018, 2019 and 2020.

On January 24, 2018, as approved by the Board of Directors, the Group granted share options totaling 5,750,000 shares to directors, officers and consultants. The remaining shares shall become vested in a series of 36 successive equal monthly installments upon grantees’ completion of each month of service to the Company over the 36‑month period measured from the grant date. On September 4, 2018, the Group canceled a portion of the options totaling 4,700,000 share options granted to directors, officers and consultants. The 1,000,000 share options were forfeited due to the resignation of the Group’s former president.

The weighted-average grant-date fair value of options granted during 2018 was US$0.51.  The fair value of the share options was measured on the respective grant dates based on the Black-Scholes option pricing model, with below assumptions made regarding expected term and volatility, risk-free interest rate and dividend yield:

Risk-free interest rate		2.19	%
Expected life (years)		2.93
Expected dividend yield		—	%
Volatility		78.55	%
Fair value of options at grant date	US$	0.51

The following table summarizes the share option activities subject to performance condition:

				Weighted-Average
				Remaining
	Number of	Weighted-Average		Contractual Term	Aggregate Intrinsic
	Options	Exercise Price		(years)	Value
Outstanding as of January 1, 2020	1,000,000	US$	0.93	3.07	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	(1,000,000)	US$	0.93	—	Nil
Outstanding as of December 31, 2020	—		—	0	Nil
Vested and expected to vest as of December 31, 2020	—		—	0	Nil
Exercisable as of December 31, 2020	—		—	—	Nil

The grant-date fair value of share options with performance condition during 2018 was US$0.51.  The fair value of the awards that are based on the performance condition was calculated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate		2.19	%
Expected life (years)		2.93
Expected dividend yield		—	%
Volatility		78.55	%
Fair value of options at grant date	US$	0.51

Restricted Ordinary Shares

On September 4, 2018, the Group granted an aggregate amount of 30,000,000 restricted ordinary shares to directors, officers and consultants. In exchange for such restricted ordinary shares granted, the Group forfeited and canceled the stock options in the total amount of 6,200,000 shares previously granted on January 24, 2018. Half of each individual’s shares will only vest if the Group meets certain target on non-GAAP profit before tax in 2019. If the Group fails to achieve this target, such half of each individual’s shares will be forfeited and canceled. The remaining half of each individual’s shares is subjected to a half year lock-up period. After the half year lock-up period, such remaining shares shall become vested in 36 successive equal monthly installments upon grantees’ completion of each month of service to the Group measured from the last day of each month after the vesting commencement date.

On January 21, 2019, the Group forfeited and canceled an aggregate amount of 15,000,000 restricted ordinary shares with the vesting condition that the Group meets certain target on non-GAAP profit before tax in 2019 previously granted on September 4, 2018. The vesting conditions of the remaining 15,000,000 ordinary shares are subjected to a half year lock-up period. After the half year lock-up period, such remaining shares shall become vested in 24 successive equal monthly installments instead of 36 installments upon grantees’ completion of each month of service to the Group measured from the last day of each month after the Vesting Commencement Date dated on March 5, 2019.

On June 17, 2020, the Group granted an aggregate amount of 29,100,000 restricted Class A ordinary shares to directors, officers and consultants as share incentive awards for their services to the Company pursuant to Eighth Amended and Restated 2004 Stock Option Plan. Among those restricted Class A ordinary shares grants, 15,600,000 restricted Class A ordinary shares are subject to restrictions on transferability that would be removed once certain pre-agreed performance targets are met, and 13,500,000 restricted Class A ordinary shares are subject to restrictions on transferability for a six-month period that would be removed in installments once certain service period conditions are met. All the restrictions attached to those shares have been removed upon the satisfaction of the underlying targets and conditions as of December 31, 2020.

Share-Based Compensation

For the years ended December 31, 2018, 2019 and 2020, the Group recorded share-based compensation of RMB3.9 million, RMB21.3 million and RMB55.1 million (US$8.4 million), respectively, for options granted to the Group’s employees and directors.

As of December 31, 2020, there was approximately RMB4.4 million (US$0.7 million) unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested options and restricted shares with performance condition. Total unrecognized compensation cost may be adjusted for future changes in estimated forfeitures.

22.2 Stock Options and Ordinary Shares Granted by Red 5

In February 2006, Red 5 adopted a Stock Incentive Plan (“Red 5 Stock Incentive Plan”) under which Red 5 may grant to its employees, director and consultants stock options to purchase common shares or restricted shares. As of December 31, 2010, 13,626,955 shares were reserved under Red 5 Stock Incentive Plan. In September 2011, Red 5 further increased the number of common shares reserved to 22,855,591. If an option shall expire or terminate for any reason without having been exercised in full, the reserved shares subject to such option shall again be available for subsequent option grants under the plan. From the inception of this plan to December 31, 2020, Red 5 granted a total of 38,191,879 options to its employees and directors at the exercise price ranging from US$0.0001 to US$0.2450 per share, which vest over four years commencing from grant date. Options expire within a period of not more than ten years from the grant date. An option granted to a person who is a greater than 10% shareholder on the date of grant may not be exercisable more than five years after the grant date. As of December 31, 2020, options to purchase 5,111,250 shares of common stock were outstanding and options to purchase 15,480,087 shares of common stock were available for future grant.

The following table summarizes the Red 5’s share option activities with its employees and directors:

				Weighted-Average
		Weighted-Average		Remaining
	Number of	Exercise Price per		Contractual Term	Aggregate
	Options	Option		(years)	Intrinsic Value
Outstanding as of January 1, 2020	5,111,250	US$	0.049	1.24	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	—		—		Nil
Outstanding as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil
Vested and expected to vest as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil
Exercisable as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil

The option’s intrinsic value was calculated by the excess of the estimated fair value of Red 5’s common shares, which was determined by the Group with the assistance of an independent valuation firm.

The options expected to vest are estimated by applying the pre-vesting forfeiture rate assumptions to total unvested options. The total intrinsic value of options exercised for the year ended December 31, 2018, 2019 and 2020 were nil.

The fair value of options granted at US$0.0178, measured on the grant date based on the Black-Scholes option pricing model with assumptions made regarding expected term and volatility, risk-free interest rate and dividend yield:

Risk-free interest rate	0.78	%
Expected life (years)	4.00
Expected dividend yield	0.00	%
Volatility	45.70	%

Red 5 recorded share-based compensation of RMB0.04 million, RMB0.05 million and nil for options and shares of restricted common stock granted for the years ended December 31, 2018, 2019 and 2020, respectively. The share-based payment awards were recorded as a component of noncontrolling interest in the consolidated financial statements.

As of December 31, 2020, unrecognized compensation cost related to share-based awards granted to Red 5 grantees is nil.

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RELATED PARTY TRANSACTIONS AND BALANCES

12 Months Ended

Dec. 31, 2020

RELATED PARTY TRANSACTIONS AND BALANCES

RELATED PARTY TRANSACTIONS AND BALANCES

23. RELATED PARTY TRANSACTIONS AND BALANCES

Transaction with equity investee

In 2013, the Group entered into an agreement with ZTE9, an equity investee of the Group, to jointly operate IPTV games in the PRC. According to the agreement, the Group pays ZTE9 a royalty fee for providing game contents on IPTV. In July 2020, ZTE9 initiated the liquidation process given its inability to repay its liabilities due. In September 2020, the Group entered into a debt settlement agreement with ZTE9 by paying ZTE9 an amount of RMB1.0 million (US$0.2 million) and all outstanding balances have been offset. No IPTV business transaction in 2019 and 2020 and total amount due to ZTE9 for IPTV business was RMB0.2 million and nil as of December 31, 2019 and 2020, respectively. No borrowing lent to ZTE9 in 2019 and 2020 and total amount due from ZTE9 for outstanding loans was RMB1.0 million and nil as of December 31, 2019 and 2020, respectively.

The Group charged service fees to Big Data of RMB0.02 million and nil for the years ended December 31, 2019 and 2020, respectively. Total amount due from Big Data was RMB0.1 million and RMB0.1 million (US$0.02 million) as of December 2019 and 2020, respectively.

Transaction with Mr. JunZhu

Mr. Jun Zhu, the chairman and chief executive officer, provided loans of RMB16.1 million and nil to the Group in 2019 and 2020, respectively. The Group has repaid a total of nil and RMB42.5 million (US$6.5 million) for the years ended December 31, 2019 and 2020, respectively. The loans were interest-free and the outstanding balance of RMB63.2 million and RMB20.6 million (US$3.2 million) remained as of December 31, 2019 and 2020, respectively.

In May 2019, the issued and outstanding ordinary shares then held by Incsight, which is wholly owned by Mr. Jun Zhu, and the issued and outstanding ordinary shares then held by Mr. Jun Zhu himself, were re-designated and re-classified as Class B ordinary shares. All other ordinary shares then issued and outstanding were re-designated and re-classified as Class A ordinary shares. On the same date, the Company amended and restated then effective Amended and Restated Memorandum of Association and Articles of Association in their entirety and adopted the Second Amended and Restated Memorandum and Articles of Association which reflect, among other things, the changes to the capital structure of the Company. As a result of such changes, Mr. Jun Zhu holds the majority of the Company’s outstanding voting power and the Company became a “controlled company” as defined under Nasdaq Stock Market Rules.

Transaction with Comtec

In June 2019, the Group entered into a share purchase agreement with Comtec Windpark Renewable (holdings) Co., Ltd. ("Comtec"), a wholly-owned subsidiary of Comtec Solar Systems Group Limited (SEHK: 00712) (“Comtec Group”), an entity affiliated with Kwok Keung Chau, independent director of the Company. Pursuant to the share purchase agreement, the Company has issued 3,444,882 Class A ordinary shares to purchase 9.9% equity interest in Zhenjiang Kexin, a lithium battery management system and power storage system supplier.

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(LOSS) INCOME PER SHARE

12 Months Ended

Dec. 31, 2020

(LOSS) INCOME PER SHARE

(LOSS) INCOME PER SHARE

24. (LOSS) INCOME PER SHARE

Loss per share is calculated as follows:

	For the year	For the year	For the year	For the year
	ended December	ended December	ended December	ended December
	31, 2018	31, 2019	31, 2020	31, 2020
	RMB	RMB	RMB	US$
				(Note 3)
Numerator:
Net (loss) income attributable to ordinary shareholders before change in redeemable noncontrolling interest	(217,092,926)	(177,795,168)	397,883,388	60,978,298
Change in redeemable noncontrolling interest	(40,918,773)	(12,827,598)	(1,190,122)	(182,394)
Net (loss) income attributable to ordinary shareholders	(258,011,699)	(190,622,766)	396,693,266	60,795,904
Denominator:
Denominator for basic and diluted (loss) income per share – weighted-average shares outstanding	62,114,760	106,407,008	163,599,920	163,599,920
Net (loss) income attributable to holders of ordinary shares per share
- Basic and diluted	(4.15)	(1.79)	2.42	0.37

The Company had 20,383,333,  13,213,978 and 4,200,645 stock options, warrants and non-vested shares outstanding as of December 31, 2018, 2019 and 2020, respectively, which were excluded in the computation of diluted loss per share in the periods presented, as their effect would have been anti-dilutive due to the net loss reported in such periods.

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RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2020

RESTRICTED NET ASSETS

RESTRICTED NET ASSETS

25. RESTRICTED NET ASSETS

Pursuant to laws applicable to entities incorporated in the PRC, the subsidiaries and the VIEs of the Group established in the PRC must make appropriations from after-tax profit to non-distributable reserved funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriation of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) until the accumulative amount of such reserved fund reaches 50% of their registered capital; the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for specific purposes of enterprise expansion, and the staff bonus and welfare are not distributable as cash dividends. The appropriation to these reserves by the Group’s PRC entities was nil for the years ended December 31, 2018, 2019 and 2020. The accumulated reserves as of December 31, 2020 were RMB3.8 million (US$0.6 million). In addition, due to restrictions on the distribution of registered capital from the Company’s PRC subsidiaries, the PRC subsidiaries’ registered capital of RMB11.5 million (US$1.8 million) as of December 31, 2020, were considered restricted. As a result of these PRC laws and regulations, as of December 31, 2020, approximately RMB7.7 million (US$1.2 million), were not available for distribution to the Company by its PRC subsidiaries in the form of dividends, loans or advances.

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NONCONTROLLING INTEREST

12 Months Ended

Dec. 31, 2020

NONCONTROLLING INTEREST

NONCONTROLLING INTEREST

26. NONCONTROLLING INTEREST

As of December 31, 2019, the Group’s noncontrolling interests mainly included equity interest in Red 5 and equity awards granted as compensation by the Group’s subsidiaries. The following schedule shows the effects of changes in the ownership interest of The9 Limited in its subsidiaries on equity attributed to The9 Limited for the years ended December 31, 2018, 2019 and 2020.

	December 31,	December 31,	December 31,	December 31,
	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Net (loss) income attributable to The9 Limited	(217,092,926)	(177,795,168)	397,883,388	60,978,299
Transfers (to) from the noncontrolling interest:
Change in The9 Limited’s additional paid-in capital for adjustment on noncontrolling interest as a result of issuance of common shares of Red 5 upon vesting of stock options and restricted shares (1)	—	—	—	—
Change from net (loss) income attributable to The9 Limited and transfers to noncontrolling interests	(217,092,926)	(177,795,168)	397,883,388	60,978,299

(1) In June 2016, the Group completed a share exchange transaction with L&A and certain other shareholders of Red 5, whereby the Group exchanged approximately 30.6% equity interest (on a fully-diluted basis) owned in Red 5 for a total of 723,313,020 (after a one-to-five stock split) of newly issued shares of L&A, after deducting a 6% of total shares received (769,481,940 shares) for the payment of a service fee to a third-party consultant. As a result, the percentage of noncontrolling interest in Red 5 changed from 10.4% to 58.1%, after deducting shares of Series B redeemable convertible preferred shares (“SBPS”) from total shares of Red 5.

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REDEEMABLE NONCONTROLLING INTEREST

12 Months Ended

Dec. 31, 2020

REDEEMABLE NONCONTROLLING INTEREST

REDEEMABLE NONCONTROLLING INTEREST

27. REDEEMABLE NONCONTROLLING INTEREST

The holders of SBPS were as follows:

	December 31,	December 31,
Holder	2019	2020
	Number of	Number of
	Shares	Shares
L&A International Holdings Limited	10,180,553	10,180,553
Shanghai Oriental Pearl Culture Development Co., Ltd.	17,258,399	17,258,399

On December 31, 2014, the Group considered the redemption of the SBPS to be probable. The Group accreted the carrying value of SBPS to redemption value using the effective interest rate method over the period from the issuance date to the redemption date.

A reconciliation of redeemable noncontrolling interest is as follows:

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Redeemable noncontrolling interest opening balance	341,074,539	349,046,548	53,493,724
Net loss attributable to redeemable noncontrolling interest	(4,855,589)	(1,190,122)	(182,394)
Change in redeemable noncontrolling interest	12,827,598	1,190,122	182,394
Redeemable noncontrolling interest ending balance	349,046,548	349,046,548	53,493,724

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DISPOSAL OF SUBSIDIARIES

12 Months Ended

Dec. 31, 2020

DISPOSAL OF SUBSIDIARIES

DISPOSAL OF SUBSIDIARIES

28. DISPOSAL OF SUBSIDIARIES

On September 26, 2019, the Group entered into an agreement with Kapler Pte. Ltd. to sell three subsidiaries namely, The9 Computer, C9I Shanghai and Shanghai Kaie for total consideration of RMB493.0 million (US$75.6 million). These subsidiaries hold the land use rights and office buildings located at Zhangjiang, Shanghai. The transaction was completed on February 21, 2020 and the Group has recorded a gain of RMB391.8 million (US$60.1 million).

On September 9, 2020, the provisional liquidator of Asian Development made a winding-up order and the High Court of Hong Kong gazetted this order on September 18, 2020. The Official Receiver’s Office has appointed a liquidator to perform the work and duties to the winding-up of Asian Development, including the prosecution of insolvency offences and disqualification of directors. Followed by the winding-up order issued by the court, the Group has lost control of Asian Development and deconsolidated Asian Development as of the date of the court order. The obligation for the payment of pledged loan remained with Asian Development as it is a limited liability company and the Group has recognized an amount of RMB83.7 million (US$12.0 million) to the gain on disposal of Asian Development.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2020

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

29. COMMITMENTS AND CONTINGENCIES

29.1 Other operating commitments

In October 2016, the Group had raised RMB57.5 million (US$8.8 million), and the Group planned to raise an additional RMB100.0 million (US$15.3 million) until CrossFire New Mobile Game is launched. Under this fundraising arrangement, the Group will share certain percentages of revenues from CrossFire New Mobile Game to investors providing funding to the Group. The Group does not plan to finance the remaining RMB100.0 million (US$15.3 million) from the planned fundraising arrangement. The Group is obligated to pay an amount of US$2.0 million within 30 days after commercial launch date of the game to Smilegate as minimum guarantee for royalty. In April 2020, Inner Mongolia Culture Assets and Equity Exchange filed a civil claim against Wuxi Qudong and Shanghai IT based on the cooperation agreement entered in September 2016. Inner Mongolia Culture Assets and Equity Exchange claims to request a refund of RMB57.5 million (US$8.8 million) which the Group has previously raised to finance the early phase development of CrossFire New Mobile Game and the interest compensation on the fund raised amounting to RMB4.6 million (US$0.7 million). On October 20, 2020, Intermediate Court of Changsha City, Hunan Province issued a decision to reject all claims against the Group. As of December 31, 2020, Inner Mongolia Culture Assets and Equity Exchange did not appeal against the sentence of the court in the period granted and no further claim filed by Inner Mongolia Culture Assets and Equity Exchange against the Group.

In June 2017, Shanghai IT entered into an investment agreement with the shareholders of Beijing Ti Knight where Shanghai IT will invest a total of RMB9.0 million (US$1.4 million) in Beijing Ti Knight. As of December 31, 2020, Shanghai IT has invested RMB4.9 million (US$0.8 million) and has a remaining capital contribution commitment amounting to RMB4.1 million (US$0.6 million). Shanghai IT’s purchase commitment amounting to RMB6.8 million (US$1.0 million) for the outsourcing development agreement entered on October 9, 2016 with Beijing Ti Knight will be waived if Shanghai IT’s accumulated investment in Beijing Ti Knight is more than RMB6.0 million (US$0.9 million). Hence, as of December 31, 2020, the Group has both a capital commitment and a purchase commitment amounting to RMB4.1 million (US$0.6 million) and RMB6.8 million (US$1.0 million), respectively, but the purchase commitment will be waived under the condition that accumulated investment in Beijing Ti Knight by Shanghai IT is more than RMB6.0 million (US$0.9 million). As of December 31, 2020, the agreements have not been terminated but the outsourcing development of the related game has been transferred to a third-party company.

In 2019, Jiu Gang has signed a joint venture agreement with Shenzhen EN-plus Technologies Co., Ltd. ("EN+"), an electric vehicle charging equipment company incorporated in the PRC, to establish a joint venture to engage in sales of new energy electric vehicle charging equipment, investment, construction and operation of charging stations, and provision of operational services for urban charging equipment and platforms for electric vehicles. According to the joint venture agreement, the Group will make a cash investment of RMB50.0 million (US$7.7 million) in the joint venture in consideration for which it will receive 80% equity interest in the joint venture, and EN+ will contribute its current and future proprietary electric vehicle charging technology to the joint venture in consideration for which it will receive a 20% equity interest of the joint venture. As of December 31, 2020, there has been no progress with forming the joint venture.

In March 2019, the Group entered into a joint venture agreement with F&F to establish a joint venture to manufacture, market, distribute and sell electric cars in the PRC. Under the terms of joint venture agreement, the Group will make capital contribution of up to US$600.0 million in three equal installments to the joint venture, and F&F will make contributions including its use rights for a piece of land in the PRC to manufacture electric cars and will grant the joint venture an exclusive license to manufacture, market, distribute and sell certain F&F’s car models and other potential selected car models in the PRC, in each case subject to the satisfaction of certain conditions, such as establishment of the joint venture and funding arrangements. The Group is only obligated to contribute capital into the joint venture if the Group can raise funds for this joint venture. The Group has paid the initial deposit of US$5.0 million in April 2019. In November 2020, the Group converted the initial deposit of US$5.0 million into 2,994,011 Class B ordinary shares of FF Intelligent, the holding company of F&F that operates its electric vehicles business, at a pre-agreed conversion price set forth in the joint venture agreement. As a result of this conversion, the joint venture agreement with F&F was deemed to be terminated and the capital commitment in the joint venture agreement was deemed released.

In September 2020, the Group entered into a master cooperation and publishing agreement with Voodoo, a French game developer and publisher, to cooperate on the publishing and operations of casual games in mainland China. Pursuant to the master cooperation and publishing agreement and amendment agreement entered in December 2020, the Group obtained exclusive licenses of several games developed by Voodoo. Voodoo granted the Group an exclusive, sub-licensable license to test, perform, market, promote, distribute, reproduce, modify, support and/or otherwise use or exploit such games directly or through authorized contractors in mainland China for a maximum period of three years, commencing upon the upload and distribution of the underlying games on any platform. In consideration for the exclusive license granted to the Group and as a minimum guarantee payment, the Group is to pay an aggregate amount of US$13.0 million in cash to Voodoo based on the agreed timetable, subject to satisfaction of certain conditions related to delivery of games by Voodoo, including an upfront payment of US$3.0 million that the Group has paid in September 2020. As of December 31, 2020, the game granted by Voodoo is under development.

29.2 Contingencies

In June 2016, Asian Development borrowed HK$92.3 million (US$11.9 million) from a financial services company at an annual interest rate of 2% for a term of 24 months. This loan is secured by 417,440,000 shares of L&A. Pursuant to the financing agreement, such loan is considered to be in default since the market price of the pledged shares had fallen below the collateralized stock price by more than 35% for ten consecutive trading days. Asian Development had not made any remediation pursuant to the financing agreement. Upon default, the lender shall be entitled to foreclose the pledged shares and become the legal and beneficial owner of the pledged shares. If the market value of the pledged shares cannot cover the total outstanding amount owed by Asian Development to the lender under the financing agreement, the lender may claim against Asian Development to recover any outstanding amounts under the financing agreement, in addition to foreclosure of the pledged shares as mentioned above. On September 9, 2020, the High Court of Hong Kong issued an order to wind-up Asian Development given its inability to pay for the liabilities due and has appointed provisional liquidator to close remaining corporate affairs within the statutory timeframe.

Red 5 and its affiliates are currently in dispute with Qihoo 360 and its affiliates regarding System Link and Firefall and various legal proceedings have been initiated and are ongoing in connection with such dispute since 2016 where litigations have been filed with both Intellectual Property Court of Shanghai and Hong Kong International Arbitration Centre. In May 2019, the Group has entered into an out-of-court settlement with Qihoo 360 where both the Group and Qihoo 360 agreed to withdraw litigations filed in relation to the dispute over Firefall and to liquidate the joint venture, System Link. The Group has withdrawn all the claims against Qihoo 360 and settled the litigation proceedings in Shanghai in May 2019. In August 2019, the Group has received a refund from Intellectual Property Court of Shanghai on court acceptance fee paid in 2016 and recognized other income amounting to RMB3.8 million (US$0.6 million) in 2019. As of December 31, 2020, the Group is implementing the mediation agreement with Qihoo 360 to settle the arbitration proceeding in Hong Kong.

As described in Note 27, in August 2014, Red 5 issued 27,438,952 Series B redeemable convertible preferred shares of Red 5 to a new investor, Oriental Pearl. Due to the stock exchange transaction with L&A in 2016, a 37% share of the SBPS was owned by L&A as of December 31, 2019 (see Note 27). Per Articles of Association of Red 5, major holders of SBPS, at any time on or after April 1, 2017 (the “Redemption Election”), can require Red 5 to redeem all, but not less than all, of the outstanding shares of SBPS, as applicable, in three equal annual installments. New Star, a wholly owned subsidiary of the Group, owns 39,766,589 Series A redeemable convertible preferred shares which have similar terms with the Series B redeemable convertible preferred shares. The redemption value of SBPS was US$16.5 million for the first installment, US$18.1 million for the second installment and US$19.9 million for the third installment. Since Red 5 is in a net liability position, the Group does not believe the preferred shareholders will request such redemption. As of the issuance date of these consolidated financial statements, there was no such preferred shareholder requiring Red 5 to redeem the preferred shares.

Shanghai Oh Yeah Information Technology Co., Ltd. filed several related civil claims in April 2019 against joint defendants including Shanghai IT, ZTE9 and a third-party defendant, regarding copyright infringements of their intellectual property to the Intellectual Property Court of Shanghai with a total aggregated claim amount of RMB3.0 million (US$0.5 million). The Group has assessed the likelihood of the outcome and have accrued an amount for the contingency. On July 28, 2020, the Intellectual Property Court of Shanghai granted the claims withdrawal request from Shanghai Oh Yeah Information Technology Co., Ltd. and underlying legal proceeding was dismissed.

Due to the Group’s failure to repay the convertible notes in a timely manner as stipulated in the previous deed of settlement and its amendments, in May 2020, Splendid Days obtained an injunction order from the Court of First Instance of the Hong Kong Special Administrative Region prohibiting the Group from disposing its assets worldwide up to the value of US$55.5 million and such injunction order was also registered in the High Court of the Republic of Singapore. In May 2020, Splendid Days also commenced an arbitration proceeding in Hong Kong under the rules of the Hong Kong International Arbitration Centre against the Group. The Group entered into a Settlement Deed with Splendid Days and other parties named therein to settle the Convertible Notes. The injunction order against the Group has been discharged. Upon the satisfaction of the conditions set forth in the Settlement Deed, the arbitration proceeding will be terminated. As of December 31, 2020, the arbitration proceeding has not been terminated. The hearing of the arbitration proceeding is expected to be held in April 2021.

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SEGMENT REPORTING

12 Months Ended

Dec. 31, 2020

SEGMENT REPORTING

SEGMENT REPORTING

30. SEGMENT REPORTING

The Group operates in one segment whose business is developing and operating online games and related services. The Group’s chief operating decision maker is the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group generates its revenues from customers in the Greater China (including PRC, Taiwan, Hong Kong and Macau) and other areas for the years ended December 31, 2018, 2019 and 2020.

The following geographic area information includes net revenues based on location of players for the years ended December 31, 2018, 2019 and 2020:

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Greater China	16,430,205	182,107	625,488	95,860
Other areas	1,001,653	159,388	—	—
Total	17,431,858	341,495	625,488	95,860

The majority of the Group’s assets is located in Greater China.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2020

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

31. SUBSEQUENT EVENTS

In January 2021, the Company entered into a share subscription and warrant purchase agreement with the holding entities of several investors (“Investors”) in the cryptocurrencies mining industry based on the pre-agreed legally-binding term sheet. Pursuant to the Purchase Agreement, the Company issued 8,108,100 Class A ordinary shares in aggregate at US$0.1233 per share and 207,891,840 warrants in aggregate, to the Investors in February 2021. The warrants will only be exercisable upon the satisfaction of its respective condition in connection with the market capitalization of the Company reaching US$100 million, US$300 million, US$500 million and US$1 billion within the time frames of 6 months, 12 months, 24 months and 36 months from its issuance date, respectively. The transaction was closed in February 2021.

In February 2021, the Company issued and sold (i) a one-year convertible note in a principal amount of US$5,000,000, (ii) 50,000 ADSs, and (iii) 10,000,000 Class A ordinary shares, for an aggregate consideration of US$5,000,000 to Streeterville. The convertible note bears interest at a rate of 6.0% per year, computed on the basis of a 360-day year. Streeterville has the right, at any time after six months have elapsed since the purchase date until the outstanding balance has been paid in full, at its election, to convert all or any portion of the outstanding balance into ADSs of the Company’s at an initial conversion price of US$14 per ADS, each ADS representing thirty Class A ordinary shares, subject to adjustment. Payment of the redemption amount could be in cash or the Company’s ADSs, provided that any redemption made in cash which exceed half of the original principal amount will be subject to a ten percent (10%) premium.The Company has the right to prepay all or any portion of the outstanding balance, at any time, subject to fifteen percent (15%) premium on the prepaid amount. In the event the principal amount and interest accrued for the convertible note issued to Streeterville are fully repaid, the Company have the right to repurchase the remaining Class A ordinary shares held by Streeterville that are unsold at US$0.0001 per share.

In February 2021, NBTC Limited, the Company’s wholly-owned subsidiary, signed a strategic cooperation framework purchase agreement, or the Cooperation Agreement, with Shenzhen MicroBT Electronics Technology Co., Ltd., the manufacturer of WhatsMiner bitcoin mining machines. Pursuant to the Cooperation Agreement, upon the payment of a deposit, NBTC Limited has the right of first offer to purchase 5,000 WhatsMiner bitcoin mining machines from MicroBT within one year, including but not limited to models M32 and M31S. The Company completed first batch purchase of 440 WhatsMiner M32 machines in February 2021. Other than WhatsMiner bitcoin mining machines, the Company also plan to continue purchasing different types of cryptocurrency mining machines in the near future.

In February 2021 the Company entered into a standby equity distribution agreement, or the SEDA, with YA II PN, LTD., a Cayman Islands exempt limited partnership managed by Yorkville Advisor Global, LP pursuant to which the Company are able to sell up to US$100.0 million of the Company’s ADSs solely at the Company’s request at any time during the 36 months following the date of the SEDA.

In February 2021, the Company entered into purchase agreements with five Bitcoin mining machine owners to purchase Bitcoin mining machines by issuance of the Company’s Class A ordinary shares. Pursuant to the purchase agreements, the Company issued an aggregate of 26,838,360 Class A ordinary shares in exchange for 26,007 Bitcoin mining machines, with a total hash rate of approximately 549PH/S, accounting for about 0.36% of the global hash rate of Bitcoin. Majority of these mining machines have already been deployed in Xinjiang, Sichuan and Gansu in China. The number of Class A ordinary shares issued to each owner was determined based on the fair market value of Bitcoin mining machines, as apprised by an independent valuation firm prior to the execution of the purchase agreements, at a pre-agreed per share price of approximately US$0.37 per Class A ordinary share (equivalent to US$11.18 per ADS).

In February 2021, the Company’s board of directors and board committees authorized and approved the issuance of an aggregate number of 33,090,000 restricted Class A ordinary shares of the Company to certain directors, executive officers, employees and consultants of the Company as share incentive awards for their services to us pursuant to the Option Plan. Among those restricted Class A ordinary shares grants, 32,190,000 restricted Class A ordinary shares are subject to restrictions on transferability that would be removed upon the satisfaction of the conditions that half of the restricted shares should vest if the Company’s market capitalization reaches US$400 million and the other half should vest if the Company’s market capitalization reaches US$500 million. The Company also granted 900,000 restricted Class A ordinary share units to the Company’s directors which are immediately vested and issued the same number of shares.

In February 2021, the Company entered into a share purchase agreement with each of the four investors in the cryptocurrencies mining industry, respectively. Pursuant to the share purchase agreements, the Company should issue 9,231,240 Class A ordinary shares in aggregate to investors for an aggregate consideration of US$11.5 million. Such transactions were subsequently closed. Pursuant to the share purchase agreements, as soon as practicable following the filing of the Company’s annual report on Form 20-F for the year ended December 31, 2020, the Company should file a registration statement on Form F-3 covering resale of the investors’ Class A ordinary shares.

In February 2021, the Company entered into a legally binding memorandum of understanding on the acquisition of 70% equity interest in Hangzhou SuanLiTechnology Co., Ltd., a cryptocurrency cloud mining blockchain Software-as-a-Service company. The acquisition consideration would be approximately US$7.0 million, subject to due diligence and valuation to be conducted by an independent valuation firm. The Company will pay the acquisition consideration by issuance of Class A ordinary shares at a price of US$82.89 per ADS, representing the closing market price of the Company’s ADSs prior to the signing of the memorandum of understanding.

In February 2021, the Company signed a framework agreement with a Filecoin mining machine vendor to purchase Filecoin mining machines for cash consideration of US$10 million.

In March 2021, the Company entered into purchase agreements with five Bitcoin mining machine owners to purchase Bitcoin mining machines by issuance of the Company’s Class A ordinary shares. Pursuant to the purchase agreements, the Company issued an aggregate of 3,832,830 Class A ordinary shares in exchange for various Bitcoin mining machines including different brands, such as WhatsMiner, AntMiner and AvalonMiner, with a total number of 8,489 units and a total hash rate of approximately 251PH/S. These Bitcoin mining machines have already been deployed in Qinghai, Xinjiang and Inner Mongolia in China. The number of Class A ordinary shares issued to each owner was determined based on the fair market value of Bitcoin mining machines, as apprised by an independent valuation firm prior to the execution of the purchase agreements, at a pre-agreed per share price of approximately US$0.78 per Class A ordinary share (equivalent to US$23.35 per ADS).

In March 2021, the Company signed three legally-binding memoranda of understanding with three unrelated Bitcoin mining machine owners to purchase Bitcoin mining machines by the issuance of Class A ordinary shares. According to the memoranda of understanding, the Company will issue approximately 5,883,750 Class A ordinary shares (equivalent to 196,125 ADSs) to the sellers based on a per share price of approximately US$1.3 (equivalent to US$38.51 per ADS). The number of Class A ordinary shares to be issued is subject to certain price adjustment mechanisms to be assessed 6 months after the signing of the definitive agreements. The Company will designate an independent valuation firm to conduct examination and assessment of the Bitcoin mining machine fair market value, and will make adjustment to the number of Class A ordinary shares to be issued if needed.

In March 2021, the Company issued and sold a one-year convertible note in a principal amount of US$20,000,000 to Streeterville for an aggregate consideration of US$20,000,000. The Company are obligated to register certain number of ADSs for the resale of the Class A ordinary shares issuable upon the conversion of such note. The convertible note bears interest at a rate of 6.0% per year, computed on the basis of a 360-day year. Streeterville has the right, at any time after six months have elapsed since the purchase date until the outstanding balance has been paid in full, at its election, to convert all or any portion of the outstanding balance into ADSs of the Company’s at an initial conversion price of per ADS calculated as ninety percent (90%) of the lower of (a) the average of the closing trade prices during the five (5) trading days immediately preceding the date of the conversion, and (b) the closing trade price on the trading day immediately preceding the date of the conversion. Beginning on the date that is six months from the note purchase date, Streeterville has the right, exercisable at any time in its sole and absolute discretion, to redeem any portion of the convertible note up to US$3,360,000 per calendar month. Payment of the redemption amount could be in cash or the Company’s ADSs, provided that any redemptions made in cash which exceed half of the original principal amount will be subject to a ten percent (10%) premium. The Company have the right to prepay all or any portion of the outstanding balance, at any time, subject to fifteen percent (15%) premium on the prepaid amount.

In March 2021, the Company’s wholly-owned subsidiary NBTC Limited signed a Bitcoin mining machine purchase agreement with Bitmain Technologies Limited. Pursuant to the purchase agreement, the Company will purchase 24,000 Antminer S19j Bitcoin mining machines, which are scheduled to deliver starting from November 2021, for a total consideration of US$82,800,000 payable in installments according to the agreed time schedule. The Company has made the first installment payment of US$16.6 million on March 22, 2021.

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FINANCIAL INFORMATION OF PARENT COMPANY

12 Months Ended

Dec. 31, 2020

FINANCIAL INFORMATION OF PARENT COMPANY

FINANCIAL INFORMATION OF PARENT COMPANY

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE YEARS ENDED DECEMBER 31, 2018, 2019 AND 2020

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
Operating expenses:
General and administrative	(21,435,150)	(68,165,230)	(87,638,664)	(13,431,213)
Total operating expenses	(21,435,150)	(68,165,230)	(87,638,664)	(13,431,213)
Loss from operations	(21,435,150)	(68,165,230)	(87,638,664)	(13,431,213)
Impairment on equity investment	—	—	(1,172,755)	(179,733)
Interest expenses	(98,308,205)	(33,154,189)	(2,923,055)	(447,978)
Fair value change on warrants liability	2,251,427	1,292,243	37,851	5,801
Gain on extinguishment of convertible notes	—	—	56,755,902	8,698,223
Gain on waiver of interest-free loan	—	—	35,397,500	5,424,904
Foreign exchange gain (loss)	1,963,364	(1,648,652)	29,578,454	4,533,096
Other expenses, net	(18,180,060)	(1,636,394)	(40,059,304)	(6,139,355)
Loss before income tax expense and share of loss in equity method investment	(133,708,624)	(103,312,222)	(10,024,071)	(1,536,255)
Share of loss in equity method investment	—	—	(2,165,935)	(331,944)
Equity in (loss) income of subsidiaries and VIEs	(83,384,302)	(74,482,946)	410,073,394	62,846,497
Net (loss) income	(217,092,926)	(177,795,168)	397,883,388	60,978,298
Other comprehensive income (loss), net of tax:
Currency translation adjustments	7,241,192	5,426,604	(12,900,251)	(1,977,050)
Total comprehensive (loss) income	(209,851,734)	(172,368,564)	384,983,137	59,001,248

CONDENSED BALANCE SHEETS

AS OF DECEMBER 31, 2019 AND 2020

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
ASSETS
Current assets:
Cash and cash equivalents	143,896	8,545,918	1,309,719
Prepayments and other current assets, net	63,873	4,090,219	626,853
Amounts due from intercompany	1,303,065,115	1,008,125,860	154,502,048
Total current assets	1,303,272,884	1,020,761,997	156,438,620
Investments in subsidiaries and VIEs	(1,681,526,537)	(1,295,612,695)	(198,561,332)
Total assets	(378,253,653)	(274,850,698)	(42,122,712)
LIABILITIES
Current liabilities:
Short-term borrowings	34,881,000	—	—
Accrued expenses and other current liabilities	11,578,754	11,012,592	1,687,754
Warrants	198,600	1,854,957	284,285
Convertible notes	414,127,908	—	—
Total current liabilities	460,786,262	12,867,549	1,972,039
Total liabilities	460,786,262	12,867,549	1,972,039
SHAREHODERS’ EQUITY (DEFICIT)
Class A ordinary shares	7,321,099	17,197,060	2,635,565
Class B ordinary shares	648,709	900,741	138,045
Additional paid-in capital	2,539,552,478	2,695,763,016	413,143,757
Statutory reserves	28,071,982	7,326,560	1,122,844
Accumulated other comprehensive loss	(3,777,952)	(16,678,203)	(2,556,046)
Accumulated deficit	(3,410,856,231)	(2,992,227,421)	(458,578,915)
Total shareholders’ deficit	(839,039,915)	(287,718,247)	(44,094,750)
Total liabilities and shareholders’ equity	(378,253,653)	(274,850,698)	(42,122,711)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2018 2019 AND 2020

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Cash flows from operating activities:
Net (loss) income	(217,092,926)	(177,795,168)	397,883,388	60,978,298
Adjustments for:
Share-based compensation expenses	3,645,751	21,705,240	55,056,426	8,437,766
Fair value change on warrants liability	(2,251,427)	(1,292,244)	(37,851)	(5,801)
Amortization of discount and interest on convertible notes	98,308,205	33,154,191	2,923,316	448,018
Foreign exchange (gain) loss	(1,963,364)	1,648,652	(29,578,454)	(4,533,096)
Equity in loss (income) of subsidiaries and VIEs	83,384,302	74,482,946	(410,073,394)	(62,846,497)
Consulting fees paid by issuance of shares	4,172,800	35,091,686	6,781,815	1,039,359
Gain on extinguishment of convertible notes	—	—	(56,755,902)	(8,698,223)
Gain on waiver of interest-free loan	—	—	(34,881,000)	(5,345,747)
Payment of issuance cost by issuance of shares	—	—	455,658	69,833
Changes in operating assets and liabilities:
Change in prepayments and other current assets	(2,971)	(1,894)	(4,026,346)	(617,065)
Change in amounts due from intercompany	30,882,203	(28,060,447)	349,361,587	53,542,003
Change in accrued expenses and other current liabilities	898,712	6,329,916	(566,162)	(86,767)
Net cash (used in) provided by operating activities	(18,715)	(34,737,122)	276,543,081	42,382,081
Cash flows from financing activities:
Proceeds from the issuance of ordinary shares and warrants	—	—	47,430,195	7,268,995
Proceeds from the issuance of convertible note	—	—	3,358,369	514,693
Proceeds from other loans	—	34,881,000	—	—
Repayments of convertible notes	—	—	(318,929,623)	(48,878,103)
Net cash provided by (used in) financing activities	—	34,881,000	(268,141,059)	(41,094,415)
Net change in cash and cash equivalents	(18,715)	143,878	8,402,022	1,287,666
Cash and cash equivalents, beginning of year	18,733	18	143,896	22,053
Cash and cash equivalents, end of year	18	143,896	8,545,918	1,309,719
Supplement disclosure of cash flow information:
Interest paid	—	—	36,310,455	5,564,821
Income taxes paid	—	—	—	—

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PRINCIPAL ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

PRINCIPAL ACCOUNTING POLICIES

Basis of presentation

<1> Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below.

The accompanying consolidated financial statements have been prepared on a going concern basis. The Group has an accumulated deficit of approximately RMB2,992.2 million (US$458.6 million) and total current liabilities exceeded total assets by approximately RMB315.9 million (US$48.4 million) as of December 31, 2020. The Group expects to purchase cryptocurrencies mining machines to build its cryptocurrencies mining business in order to achieve overall revenue growth.

To meet its capital needs, the Group is considering multiple alternatives, including but not limited to additional equity or debt financing as outlined below. There can be no assurance that the Group will be able to complete any such transaction on acceptable terms or otherwise. If the Group is unable to obtain the necessary capital, it will need to pursue a plan to license or sell its assets, seek to be acquired by another entity, or cease operations.

These factors raise substantial doubt about the Group’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset or liability amounts that might result from the outcome of this uncertainty.

Additional Equity or Debt Financing

In October 2020, the Company completed a share offering by issuing 70,500,000 Class A ordinary shares and 27,025,000 warrants to purchase 2,702,500 American Depositary Shares (“ADS”), each ADS representing thirty Class A ordinary shares and each warrant exercisable for the purchase of 0.1 ADS, including 3,525,000 warrants to purchase an additional 352,500 ADSs, pursuant to the over-allotment option granted to the underwriter to purchase additional warrants to cover over-allotments with an exercise price of US$3.70 per ADS. In connection with such offering, the Company also issued representative’s warrants to purchase 117,500 ADSs, each representing thirty Class A ordinary shares, to the underwriter of the offering with an exercise price of US$4.07 per ADS. The Company received net proceeds of US$8.1 million from such offering. The Company classified the representative warrants as a financial liability and the remaining warrants as equity.

In February 2021, the Company issued and sold (i) a one-year convertible note in a principal amount of US$5,000,000, (ii) 50,000 ADSs, and (iii) 10,000,000 Class A ordinary shares, for an aggregate consideration of US$5,000,000 to Streeterville Capital LLC (“Streeterville”). The convertible note bears interest at a rate of 6.0% per year, computed on the basis of a 360-day year. Streeterville has the right, at any time after six months have elapsed since the purchase date until the outstanding balance has been paid in full, at its election, to convert all or any portion of the outstanding balance into ADSs of the Company’s at an initial conversion price of US$14.00 per ADS, each ADS representing thirty Class A ordinary shares, subject to adjustment. Beginning on the date that is six months from the note purchase date, Streeterville has the right, exercisable at any time in its sole and absolute discretion, to redeem any portion of the convertible note up to US$840,000 per calendar month. Payment of the redemption amount could be in cash or the Company’s ADSs, provided that any redemption made in cash which exceeds half of the original principal amount will be subject to a ten percent (10%) premium. The Company has the right to prepay all or any portion of the outstanding balance, at any time, subject to fifteen percent (15%) premium on the prepaid amount. In the event the principal amount and interest accrued for the convertible note issued to Streeterville are fully repaid, the Company has the right to repurchase the remaining Class A ordinary shares held by Streeterville that are unsold at US$0.0001 per share.

In February 2021, the Group entered into a standby equity distribution agreement (“SEDA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership managed by Yorkville Advisor Global, LP, pursuant to which the Group is able to sell up to US$100.0 million of the Company’s ADSs solely at the Group’s request at any time during the 36 months following the date of the SEDA. The preliminary purchase price per ADS shall be adjusted to the greater of (A) 90% of the average of the 3 lowest daily volume weighted average price of the Company’s ADSs and during the five consecutive trading days commencing on the trading day immediately following the preliminary closing date or (B) 85% of the average of the five daily volume weighted average price of the Company’s ADSs during the secondary pricing period. The Group intends to use the proceeds from the potential offering of the ADSs pursuant to the SEDA to fund the working capital required on business growth in the cryptocurrencies mining operation. The Group intends to obtain financing via the issuance of Class A ordinary shares and warrants through public or private placements, as needed.

Consolidation

<2> Consolidation

The consolidated financial statements include the financial statements of The9 Limited, its subsidiaries and VIEs in which it has a controlling financial interest. A subsidiary is consolidated from the date on which the Group obtained control and continues to be consolidated until the date that such control ceases. A controlling financial interest is typically determined when a company holds a majority of the voting equity interest in an entity. If the Group demonstrates its ability to control a VIE through its rights to all the residual benefits of the VIE and its obligation to fund losses of the VIE, then the VIE is consolidated. All intercompany balances and transactions between The9 Limited, its subsidiaries and VIEs have been eliminated in consolidation.

In April 2010, the Group acquired a controlling interest in Red 5. In June 2016, the Group completed a share exchange transaction with L&A International Holding Limited (“L&A”) and certain other shareholders of Red 5. After the transaction, the Group owned 34.71% shareholding in Red 5. As the Group controls a majority of Board of Director seats and only a majority vote is required to approve Board of Director resolutions, and as the Group has continuously funded the operation of Red 5, the Group still retained effective control over Red 5. Red 5 remained as a consolidated entity of the Group as of December 31, 2020.

PRC laws and regulations currently prohibit or restrict foreign ownership of internet-related business. In September 2009, the General Administration of Press and Publication Radio, Film and Television (“GAPPRFT”) further promulgated the Circular Regarding the Implementation of the Department Reorganization Regulation by State Council and Relevant Interpretation by State Commission Office for Public Sector Reform to Further Strengthen the Administration of Pre-approval on Online Games and Approval on Import Online Games (the “GAPP Circular”). Pursuant to Administrative Measures on Network Publication (the “Network Publication Measures”) jointly issued by GAPPRFT and the Ministry of Information Industry (which has subsequently been reorganized as the Ministry of Industry and Information Technology) (“MIIT”) on February 4, 2016, effective from March 2016, wholly foreign-owned enterprises, Sino-foreign equity joint ventures and Sino-foreign cooperative enterprises shall not engage in the provision of web publishing services, including online game services. Prior examination and approval by GAPPRFT are required on project cooperation involving internet publishing services between an internet publishing services and a wholly foreign-owned enterprise, Sino-foreign equity joint venture, or Sino-foreign cooperative enterprise within China or an overseas organization or individual. It is unclear whether PRC authorities will deem the Group’s VIE structure as a kind of such “manners of cooperation” by foreign investors to gain control over or participate in domestic online game operators, and it is not clear whether GAPPRFT and MIIT have regulatory authority over the ownership structures of online game companies based in China and online game operations in China. Therefore, the Group believes that its ability to direct those activities of its VIEs that most significantly impact their economic performance is not affected by the GAPP Circular.

Use of estimates

<3> Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenues and expenses during the reported periods. Significant accounting estimates reflected in the Group’s consolidated financial statements include the valuation of non-marketable equity investments and determination of other-than-temporary impairment, allowance for doubtful accounts, revenue recognition, assessment of impairment of other long-lived assets, assessment of impairment of advances to suppliers and other advances, incremental borrowing rates for lease assessment, fair value of redeemable noncontrolling interest, fair value of the warrants, share-based compensation expenses, consolidation of VIEs, valuation allowances for deferred tax assets, and contingencies. Such accounting policies are affected significantly by judgments, assumptions and estimates used in the preparation of the Group's consolidated financial statements, and actual results could differ materially from these estimates.

Foreign currency translation

<4> Foreign currency translation

The Group’s reporting currency is the Renminbi (“RMB”). The Group’s functional currency, with the exception of its subsidiaries, Red 5, The9 Interactive, and Red 5 Singapore, is the RMB. The functional currency of Red 5, The9 Interactive, and Red 5 Singapore, is the United States dollar ("US$" or "U.S. dollar"), U.S. dollar, and Singapore dollar, respectively. Assets and liabilities of Red 5, The9 Interactive, and Red 5 Singapore, are translated at the current exchange rates quoted by the People’s Bank of China (the “PBOC”) in effect at the balance sheet dates. Equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average exchange rates in effect during the reporting period to RMB. Gains and losses resulting from foreign currency translation to reporting currency are recorded in accumulated other comprehensive (loss) income in the consolidated statements of changes in equity for the years presented.

Transactions denominated in currencies other than functional currencies, are translated into functional currencies at the exchange rates prevailing at the dates of the transactions. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of operations and comprehensive loss. Monetary assets and liabilities denominated in foreign currencies are translated into functional currencies using the applicable exchange rates at the balance sheet dates. All such exchange gains and losses are included in foreign exchange loss in the consolidated statements of operations and comprehensive (loss) income.

Cash and cash equivalents

<5> Cash and cash equivalents

Cash and cash equivalents represent cash on hand and highly liquid investments with a maturity date when acquired of three months or less. As of December 31, 2019 and 2020, cash and cash equivalents were comprised primarily of bank deposits where cash is deposited with reputable financial institutions. Included in cash and cash equivalents as of December 31, 2019 and 2020 are amounts denominated in U.S. dollar totaling US$0.35 million and US$4.6 million, respectively.

The RMB is not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PBOC, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in China’s foreign exchange trading system market. The Group’s aggregate amount of cash and cash equivalents denominated in RMB amounted to RMB7.6 million and RMB1.1 million (US$0.2 million) as of December 31, 2019 and 2020, respectively.

Allowance for doubtful accounts

<6> Allowance for doubtful accounts

Starting from January 1, 2020, the Group adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost and is codified in Accounting Standards Codification (“ASC”) Topic 326, Credit Losses (“ASC 326”). ASU 2016-13 replaces the existing incurred loss impairment model and introduces an expected loss approach with macroeconomic forecasts referred to as a current expected credit losses (“CECL”) methodology, which will result in more timely recognition of credit losses. There was no significant impact on its consolidated financial statements and related disclosures as a result. Under the incurred loss methodology, credit losses are only recognized when the losses are probable of having been incurred. The CECL methodology requires that the full amount of expected credit losses for the lifetime of the financial instrument be recorded at the time it is originated or acquired, considering relevant historical experience, current conditions and reasonable and supportable macroeconomic forecasts that affect the collectability of financial assets, and adjusted for changes in expected lifetime credit losses subsequently, which may require earlier recognition of credit losses.

Accounts receivable mainly consist of receivables from third-party game platforms, and other receivables, which are included in prepayments and other current assets, both of which are recorded net of allowance for doubtful accounts. Allowances for doubtful accounts are charged to general and administrative expenses. The Group provided an allowance for doubtful accounts of RMB21.2 million, RMB0.2 million and RMB2.3 million (US$0.4 million) for the years ended December 31, 2018, 2019 and 2020, respectively. The Group has written-off an amount of RMB22.2 million, RMB3.2 million and RMB2.1 million (US$0.3 million) for the years ended December 31,2018, 2019 and 2020, respectively.

Investments in equity method investee and loan to equity method investee

<7> Investments in equity method investee and loan to equity method investee

Equity investments are comprised of investments in privately held companies. The Group uses the equity method to account for an equity investment over which it has the ability to exert significant influence but does not otherwise have control. The Group records equity method investments at the cost of acquisition, plus the Group’s share in undistributed earnings and losses since acquisition. For equity investments over which the Group does not have significant influence or control, the cost method of accounting is used.

The Group has historically provided financial support to certain equity investees in the form of loans. If the Group’s share of the undistributed losses exceeds the carrying amount of an investment accounted for by the equity method, the Group continues to report losses up to the investment carrying amount, including any loans balance due from the equity investees.

The Group assesses its equity investments and loans to equity investees for impairment on a periodic basis by considering factors including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the technological feasibility of the investee’s products and technologies, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, cash burn rate, and other company-specific information including recent financing rounds. If it has been determined that the equity investment is less than its related fair value and that this decline is other-than-temporary, the carrying value of the investment and loan to equity investee is adjusted downward to reflect these declines in value.

Property, equipment and software, net

<8> Property, equipment and software, net

Property, equipment and software are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:

Leasehold improvements	Shorter of respective lease term or estimated useful life
Computer and equipment	3 to 4 years
Software	5 years
Office furniture and fixtures	3 years
Motor vehicles	5 years
Office buildings	10 to 20 years

In September 2019, the Group entered into a sale purchase agreement with Kapler Pte. Ltd. to sell three subsidiaries which hold the land use rights and office buildings located at Zhangjiang, Shanghai. The transaction for the disposal of three subsidiaries was completed in February 2020 and the Group owned no office buildings as of December 31, 2020.

Assets held for sale

<9> Assets held for sale

Assets and asset disposal groups are classified as held-for-sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Long-lived assets to be sold are classified as held for sale if all the recognition criteria in ASC 360-10-45-9 are met:

· Management, having the authority to approve the action, commits to a plan to sell the asset;

· The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;

· An active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated;

· The sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year;

· The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

· Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Assets and liabilities classified as held-for-sale are measured at lower of their carrying amount or fair value less costs to sell.

Land use right, net

<10> Land use rights, net

Land use rights represents operating lease prepayments to the PRC’s Land Bureau for usage of the parcel of land located at Zhangjiang, Shanghai. Amortization is calculated using the straight-line method over the estimated land use rights period of 44 years.

In September 2019, the Group entered into a sale purchase agreement with Kapler Pte. Ltd. to sell three subsidiaries which hold the land use rights and office buildings located at Zhangjiang, Shanghai. The transaction for the disposal of three subsidiaries was completed in February 2020 and the Group owned no land use rights as of December 31, 2020.

Impairment of long-lived assets

<11> Impairment of long-lived assets

The Group evaluates its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than the Group had originally estimated. The Group assesses the recoverability of the long-lived assets by comparing the carrying amount to the estimated future undiscounted cash flow expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets.

Indefinite-lived intangible assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the intangible asset to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized in an amount equal to that excess.

Revenue recognition

<12> Revenue recognition

Revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration of the Group expects to be entitled to in exchange for those goods or services. Depending on the terms of the contract and the laws that apply to the contract, control of the goods or services may be transferred over time or at a point in time.

Online game services

The Group earns revenue from provision of online game operation services to players on the Group’s game servers and third-party platforms and overseas licensing of the online game to other operators. The Group grants operation right on authorized games, together with associated services which are rendered to the customers over time. The Group adopts virtual item / service consumption model for the online game services. Players can access certain games free of charge, but many purchase game points to acquire in-game premium features. The Group may act as principal or agent through the various transaction arrangements.

The determination on whether to record the revenue gross or net is based on an assessment of various factors, including but not limited to whether the Group (i) is the primary obligor in the arrangement; (ii) has general inventory risk; (iii) changes the product or performs part of the services; (iv) has latitude in establishing the selling price; (v) has involvement in the determination of product or service specifications. The assessment is performed for all licensed online games.

When acting as principal

Revenues from online game operation operated through telecom carriers and certain online games operators are recognized upon consumption of the in-game premium features based on gross revenue sharing-payments to third-party operators, but net of value-added tax (“VAT”). The Group earns revenue from the sale of in-game virtual items. Revenues are recognized as the virtual items are consumed or over the estimated lives of the virtual items, which are estimated by considering the average period that players are active and players’ behavior patterns derived from operating data. Accordingly, commission fees paid to third-party operators are recorded as cost of revenues.

When acting as agent

With respect to games license arrangements entered into by third-party operators, if the terms provide that (i) third-party operators are responsible for providing game desired by the game players; (ii) the hosting and maintenance of game servers for running the games is the responsibility of third-party operators; (iii) third-party operators have the right to review and approve the pricing of in-game virtual items and the specification, modification or update of the game made by the Group; and (iv) publishing, providing payment solution and market promotion services are the responsibilities of third-party operators and the Group is responsible to provide intellectual property licensing and subsequent technical services, then the Group considers itself as an agent of the third-party operators in such arrangement with game players. Accordingly, the Group records the game revenues from these licensed games, net of amounts paid to the third-party operators.

Licensing revenue

The Group licenses its online games, most of which are developed in house, to third parties. The Group receives monthly revenue-based royalty payments from the third-party licensee operators. Monthly revenue-based royalty payments are recognized when the relevant services are delivered, provided that collectability is reasonably assured. The Group views the third-party licensee operators as its customers and recognizes revenues on a net basis, as the Group does not have the primary responsibility for fulfillment and acceptability of the game services. The Group receives additional up-front license fees from certain third-party licensee operators who are entitled to an exclusive right to access the games where initial license fee is allocated solely on the license. License fees are recognized as revenue evenly throughout the license period after commencement of the game, given that the Group’s intellectual property rights subject to the license are considered to be symbolic and the licensee has the right to access such intellectual property rights as they exist over time when the license is granted.

Technical services

Technical services are blockchain-related consulting services where the Group is to provide designing, programming, drafting of white papers, and related services to customers. These revenues are recognized when delivery of the services has occurred or when services have been rendered and the collection of the related fees is reasonably assured.

Contract balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenue recognized prior to invoicing, where the Group has satisfied its performance obligations and has the unconditional right to payment.

Deferred revenue related to unsatisfied performance obligations at the end of the period primarily consists of fees received from game players for online game services and technical services. For deferred revenue, due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. Of the deferred revenue balance at the beginning of the period, revenue of RMB 0.2 million and nil was recognized during the years ended December 31, 2019 and 2020, respectively.

Advances from customers

<13> Advances from customers

The Group licenses proprietary games to operators in other countries and receives license fees and royalty income. License fees received in advance of the monetization of the game is recorded in advances from customers.

Convertible notes

<14> Convertible notes

Convertible Notes and Beneficial Conversion Feature ("BCF")

The Group issued convertible notes and warrants in December 2015. The Group has evaluated whether the conversion feature of the notes is considered an embedded derivative instrument subject to bifurcation in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities. Based on the Group’s evaluation, the conversion feature is not considered an embedded derivative instrument subject to bifurcation as the conversion option does not provide the holder of the notes with means to net settle the contracts. Convertible notes, for which the embedded conversion feature does not qualify for derivative treatment, are evaluated to determine if the effective rate of conversion per the terms of the convertible notes agreement is below market value. In these instances, the value of the BCF is determined as the intrinsic value of the conversion feature is recorded as deduction to the carrying amount of the notes and credited to additional paid-in-capital. For convertible notes issued with detachable warrants, a portion of the note’s proceeds is allocated to the warrant based on the fair value of the warrants at the date of issuance. The allocated fair value for the warrants and the value of the BCF are both recorded in the consolidated financial statements as a debt discount from the face amount of the notes, which is then accreted to interest expense over the life of the related debt using the effective interest method.

The Group present the occurred debt issuance costs as a direct deduction from the convertible notes. Amortization of the costs is reported as interest expense.

Upon the extinguishment of the convertible notes, the reacquisition price is allocated to the repurchased beneficial conversion feature measured at the intrinsic value as of the extinguishment date, the residual amount allocated to convertible debt. The difference between the reacquisition price of convertible debt and the net carrying amount of the extinguished convertible debt is recognized as gain or loss in the statement of operations and comprehensive (loss) gain of the period of extinguishment.

Warrants

<15>Warrants

The Group accounts for the detachable warrants issued in connection with convertible notes under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock. The Group classifies warrants in its consolidated balance sheet as a liability which is revalued at each balance sheet date subsequent to the initial issuance. The Group uses the Black-Scholes-Merton pricing model (the “Black-Scholes Model”) to value the detachable warrants issued in connection with convertible notes and uses binomial option pricing model to value the warrants issued in connection with equity-linked instrument. Determining the appropriate fair-value model and calculating the fair value of warrants requires considerable judgment. A small change in the estimates used may cause a relatively large change in the estimated valuation. The estimated volatility of the Group’s common stock at the date of issuance, and at each subsequent reporting period, is based on historical fluctuations in the Company’s stock price. The risk-free interest rate is based on United States Treasury zero-coupon issues with a maturity similar to the expected remaining life of the warrants at the valuation date. The expected life of the warrants is based on the historical pattern of exercises of warrants.

The Group accounts for the warrants issued in connection with equity-linked instrument under authoritative guidance on accounting from ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Group classifies warrants in its consolidated balance sheet as a liability or equity based on the nature and characteristics of each warrant issued. The proceeds are allocated first to the liability classified warrants at the full fair value then the remaining proceeds allocated to the equity instruments offered. For liability classified warrants, the warrants are initial recognized on its fair value as of issuance date then remeasured at each reporting period and adjusted to fair value. The changes in the fair value of the warrant liability are recorded in the income of the period.

Cost of revenues

<16> Cost of revenues

Cost of revenues consists primarily of online game royalties, payroll, revenue sharing to third-party game platform, telecom carriers and other suppliers, maintenance and rental of Internet data center sites, depreciation and amortization of computer equipment and software, and other overhead expenses directly attributable to the services provided.

Product development costs

<17> Product development costs

For software development costs, including online games, to be sold or marketed to customers, the Group expenses software development costs incurred prior to reaching technological feasibility. Once a software product has reached technological feasibility, all subsequent software costs for that product are capitalized until that product is released for marketing. After an online game is released, the capitalized product development costs are amortized over the estimated product life. For the years ended December 31, 2018, 2019 and 2020, although software products have reached technological feasibility, total software costs incurred subsequent to reaching technological feasibility were immaterial and therefore not capitalized.

For website and internally used software development costs, the Group expenses all costs incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and software. Costs incurred in the application and infrastructure development phase are capitalized and amortized over the estimated product life. Since the inception of the Group, the amount of internally generated costs qualifying for capitalization has been immaterial and, as a result, all website and internally used software development costs have been expensed as incurred.

Product development costs consist primarily of outsourced research and development, payroll, depreciation charges and other overhead for the development of the Group’s proprietary games. Other overhead product development costs include costs incurred by the Group to develop, maintain, monitor, and manage its websites.

Sales and marketing expenses

<18> Sales and marketing expenses

Sales and marketing expenses consist primarily of advertising and promotional expenses, payroll and other overhead expenses incurred by the Group’s sales and marketing personnel. Advertising expenses in the amount of RMB 0.3 million, RMB0.2 million and RMB0.1 million (US$0.02 million) for the years ended December 31, 2018, 2019 and 2020, respectively, were expensed as incurred.

Government grants

<19> Government grants

Unrestricted government subsidies from local government agencies allowing the Group full discretion to utilize the funds were RMB1.6 million, RMB1.2 million and RMB 0.1 million (US$0.02 million) for the years ended December 31, 2018, 2019 and 2020, respectively, which were recorded in other income, net in the consolidated statements of operations and comprehensive loss.

Share-based compensation

<20> Share-based compensation

The Group has granted share-based compensation awards to certain employees under several equity plans. The Group measures the cost of employee services received in exchange for an equity award, based on the fair value of the award at the date of grant. Share-based compensation expense is recognized net of estimated forfeitures, determined based on historical experience. The Group recognizes share-based compensation expense over the requisite service period. For performance and market-based awards which also require a service period, the Group uses graded vesting over the longer of the derived service period or when the performance condition is considered probable. The Company determines the grant date fair value of stock options using a Black-Scholes Model with assumptions made regarding expected term, volatility, risk-free interest rate, and dividend yield. The fair value of the stock options containing a market condition is estimated using a Monte Carlo simulation model. For options awarded by private subsidiaries of the Group, the fair value of shares is estimated based on the equity value of the subsidiary. The Group evaluates the fair value of the subsidiary by making judgments and assumptions about the projected financial and operating results of the subsidiary. Once the equity value of the subsidiary is determined, it is allocated (as applicable) into the various classes of shares and options using the option-pricing method, which is one of the generally accepted valuation methodologies. On January 1, 2019, the Group adopted ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvement to Nonemployee Share-based Payment Accounting ("ASU 2018-07") to amend the accounting for share-based payment awards issued to nonemployees. Under ASU 2018-07, the accounting for awards to non-employees is similar to the model for employee awards.

The expected term represents the period of time that stock-based awards granted are expected to be outstanding. The expected term of stock-based awards granted is determined based on historical data on employee exercise and post-vesting employment termination behavior. Expected volatilities are based on historical volatilities of the Company’s ordinary shares. Risk-free interest rate is based on United States government bonds issued with maturity terms similar to the expected term of the stock-based awards.

The Group recognizes compensation expense, net of estimated forfeitures, on all share-based awards on a straight-line basis over the requisite service period, which is generally a one-to-four year vesting period or in the case of market-based awards, over the greater of the vesting period or derived service period. Forfeiture rate is estimated based on historical forfeiture patterns and adjusted to reflect future changes in circumstances and facts, if any. If actual forfeitures differ from those estimates, the estimates may need to be revised in subsequent periods. The Group uses historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

For stock option modifications, the Group compares the fair value of the original award immediately before and after the modification. For modifications, or probable-to-probable vesting conditions, the incremental fair value of fully vested awards is recognized as expense on the date of the modification, with the incremental fair value of unvested awards recognized ratably over the new service period.

Leases

<21> Leases

The Group applied ASC 842, Leases, on January 1, 2019 on a modified retrospective basis and has elected not to recast comparative periods. Right-of-use ("ROU") assets represent the Group's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. The operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As most of the Group's leases do not provide an implicit rate, the Company uses the PBOC's incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Group's lease terms may include options to extend or terminate the lease. Renewal options are considered within the ROU assets and lease liability when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For operating leases with a term of one year or less, the Group has elected to not recognize a lease liability or ROU asset on its consolidated balance sheet. Instead, it recognizes the lease payments as expense on a straight-line basis over the lease term. Short-term lease expense is immaterial to its consolidated statements of operations, comprehensive loss, and cash flows. The Group has operating lease agreements with insignificant non-lease components and has elected the practical expedient to combine and account for lease and non-lease components as a single lease component.

Income taxes

<22> Income taxes

Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities. Income taxes are accounted for under the asset and liability method. Deferred taxes are determined based upon differences between the financial reporting and tax bases of assets and liabilities at currently enacted statutory tax rates for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized as income in the period of change. A valuation allowance is provided on deferred tax assets to the extent that it is more likely than not that such deferred tax assets will not be realized. The total income tax provision includes current tax expenses under applicable tax regulations and the change in the balance of deferred tax assets and liabilities.

The Group recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than not to be sustained upon audit by the relevant tax authority. Income tax related interest is classified as interest expenses and penalties as income tax expense.

Redeemable noncontrolling interests

<23> Redeemable noncontrolling interests

Redeemable noncontrolling interests are equity interests of the Group's consolidated subsidiary not attributable to the Group that has redemption features that are not solely within the Group’s control. These interests are classified as temporary equity because their redemption is considered probable. These interests are measured at the greater of estimated redemption value at the end of each reporting period or the initial carrying amount of the redeemable noncontrolling interests adjusted for cumulative earnings (loss) allocations.

Noncontrolling interest

<24> Noncontrolling interest

A noncontrolling interest in a subsidiary or VIE of the Group represents the portion of the equity (net assets) in the subsidiary or VIE not directly or indirectly attributable to the Group. Noncontrolling interests are presented as a separate component of equity in the consolidated balance sheets and modifies the presentation of net (loss) income by requiring earnings and other comprehensive income loss to be attributed to controlling and noncontrolling interest.

(Loss) income per share

<25> (Loss) income per share

Basic (loss) income per share is computed by dividing net (loss) income attributable to the holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year. Diluted (loss) income per share is calculated by dividing net (loss) income attributable to the holders of ordinary shares as adjusted for the effect of dilutive ordinary share equivalents, if any, by the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. Ordinary share equivalents of stock options and warrants are calculated using the treasury stock method and are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net (loss) income is recorded.

Segment reporting

<26> Segment reporting

The Group has one operating segment whose business is developing and operating online games and related services. The Group’s chief operating decision maker is the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group generates its revenues from customers in Greater China and other areas.

Certain risks and concentration

<27> Certain risks and concentration

Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and prepayments and other current assets. As of December 31, 2019 and 2020, substantially all of the Group’s cash and cash equivalents were held by major financial institutions, which management believes are of high credit worthiness.

Fair value measurements

<28> Fair value measurements

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 considers assumptions that market participants would use when pricing the asset or liability. The fair value measurement guidance provides a fair value hierarchy that 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 as follows:

Level 1 inputs are unadjusted quoted prices in active markets for identical assets that the management has the ability to access at the measurement date.

Level 2 inputs include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 inputs include unobservable inputs to the valuation methodology that reflect management’s assumptions about the assumptions that market participants would use in pricing the asset. Management develops these inputs based on the best information available, including their own data.

Financial instruments

<29> Financial instruments

Financial instruments primarily consist of cash and cash equivalents, investments, accounts receivable, accounts payable, warrants, convertible notes and short-term borrowings. The carrying value of the Group’s cash and cash equivalents, investments, accounts receivable, accounts payable, convertible notes and short-term borrowings approximate their market values due to the short-term nature of these instruments.

Recent accounting pronouncements

<30> Recent accounting pronouncements

Income Taxes

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Group is currently evaluating the impact of ASU 2019-12 on its financial position, results of operations, and cash flow.

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ORGANIZATION AND NATURE OF OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2020

ORGANIZATION AND NATURE OF OPERATIONS

Schedule of Group's principal subsidiaries and VIE subsidiaries

The Group is based in China targeting fast-growing technology businesses. The Group is transitioning from an online game operation business to a cryptocurrencies mining business.

The Company’s principal subsidiaries and VIEs are as follows as of December 31, 2020:

	Date of	Place of	Legal
Name of Entity	Registration	Registration	Ownership
Principal subsidiaries:
GameNow.net (Hong Kong) Ltd. ("GameNow Hong Kong")	January‑2000	Hong Kong	100	%
China The9 Interactive Limited (“C9I”)	October‑2003	Hong Kong	100	%
China The9 Interactive (Beijing) Ltd. (“C9I Beijing”)	March‑2007	PRC	100	%
JiuTuo (Shanghai) Information Technology Ltd. ("Jiu Tuo")	July-2007	PRC	100	%
China Crown Technology Ltd. ("China Crown Technology")	November‑2007	Hong Kong	100	%
Asian Way Development Ltd. (“Asian Way”)	November‑2007	Hong Kong	100	%
New Star International Development Ltd. (“New Star”)	January‑2008	Hong Kong	100	%
Red 5 Studios, Inc. (“Red 5”)(Note 2.2)	June‑2005	USA	34.71	%
Red 5 Singapore Pte. Ltd. (“Red 5 Singapore”) (Note 2.2)	April‑2010	Singapore	34.71	%
The9 Interactive, Inc. (“The9 Interactive”)	June‑2010	USA	100	%
Shanghai Jiu Gang  Electronic Technology Ltd. (“Jiu Gang”)	December‑2014	PRC	100	%
City Channel Ltd. (“City Channel”)	June‑2006	Hong Kong	100	%
The9 Singapore Pte. Ltd. (“The9 Singapore”)	April‑2010	Singapore	100	%
Ninebit Inc. (“Ninebit”)	January -2018	Cayman Islands	100	%
1111 Limited (“1111”)	January -2018	Hong Kong	100	%
Supreme Exchange Limited (“Supreme”)	December‑2018	Malta	90	%
BET 111 Ltd. ("Bet 111")	January -2019	Malta	90	%
Coin Exchange Ltd ("Coin")	January -2019	Malta	90	%
The9 EV  Limited ("The9 EV")	May-2019	Hong Kong	100	%
NBTC Limited (“NBTC”)	June-2019	Hong Kong	100	%
FF The9 China Joint Venture Limited ("FF The9")	September-2019	Hong Kong	50	%
Huiling Computer Technology Consulting (Shanghai) Co.Ltd. ("Huiling")	March-2019	PRC	100	%
Leixian Information Technology (Shanghai) Co., Ltd. ("Leixian")	March-2019	PRC	100	%
Variable interest entity:
Shanghai The9 Information Technology Co., Ltd. (“Shanghai IT”) (Note 4)	September‑2000	PRC	N/A

Subsidiaries and VIEs of Shanghai IT:

			Legal
	Date of	Place of	Ownership Held
Name of Entity	Registration	Registration	by Shanghai IT
Shanghai Jiushi Interactive Network Technology Co., Ltd. (“Jiushi”)	July‑2011	PRC	80	%
Shanghai ShencaiChengjiu Information Technology Co., Ltd. (“SH Shencai”)	May‑2015	PRC	60	%
Shanghai Zhiaojiqi Information Technology Co., Ltd. (“Shanghai Zhiaojiqi”)	November-2015	PRC	0	%
Wuxi Interest Dynamic Network Technology Co., Ltd. (“Wuxi Qudong”)	June‑2016	PRC	100	%
Changsha Quxiang Network Technology Co., Ltd. (“Changsha Quxiang”)	July‑2016	PRC	100	%
Silver Express Investments Ltd. (“Silver Express”)	November‑2007	Hong Kong	100	%

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PRINCIPAL ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

PRINCIPAL ACCOUNTING POLICIES

Schedule of estimated useful lives

Depreciation and amortization are computed using the straight-line method over the following estimated useful lives:

Leasehold improvements	Shorter of respective lease term or estimated useful life
Computer and equipment	3 to 4 years
Software	5 years
Office furniture and fixtures	3 years
Motor vehicles	5 years
Office buildings	10 to 20 years

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VARIABLE INTEREST ENTITIES (Tables)

12 Months Ended

Dec. 31, 2020

VARIABLE INTEREST ENTITIES

Schedule of financial information of VIE subsidiaries included in consolidated financial statements with intercompany balances and transactions eliminated

Summary financial information of the VIE subsidiaries included in the accompanying consolidated financial statements with intercompany balances and transactions eliminated are as follows:

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Total assets	150,615,709	10,357,329	1,587,330
Total liabilities	423,900,573	313,608,879	48,062,664

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Net revenues	16,567,372	182,119	625,488	95,860
Net loss	(49,024,050)	(51,667,515)	(52,410,094)	(8,032,199)

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ADVANCES TO SUPPLIERS (Tables)

12 Months Ended

Dec. 31, 2020

ADVANCES TO SUPPLIERS

Summary of advances to suppliers

Advances to suppliers are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Advance to subscribe tokens	10,094,972	—	—
Advance for minimum guarantee payment	—	—	—
Financing fee	—	—	—
Company registration fee	794,692	—	—
Advertising fee	255,259	—	—
Other	101,685	27,725	4,249
	11,246,608	27,725	4,249

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PREPAYMENTS AND OTHER CURRENT ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2020

PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Schedule of prepayments and other current assets

Prepayments and other current assets are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Employee advances	1,648,197	2,292,700	351,372
Input VAT recoverable	1,441,700	1,780,484	272,871
Prepayments and deposits	1,488,463	1,551,118	237,719
Refundable withholding tax	1,297,016	—	—
Other receivables, net of allowance for doubtful accounts of  RMB5,343,427 and RMB6,619,312  as of December 31, 2019 and 2020, respectively	2,973,158	4,231,165	648,454
	8,848,534	9,855,467	1,510,416

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ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE (Tables)

12 Months Ended

Dec. 31, 2020

ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE

Summary of assets and liabilities held for sale

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Assets classified as held-for-sale
Cash and cash equivalents	43,027,475	—	—
Prepayments and other current assets	5,162,857	—	—
Property, equipment and software, net	14,051,044	—	—
Land use rights, net	61,148,974	—	—
Total assets classified as held-for-sale	123,390,350	—	—
Liabilities directly associated with assets held-for-sale
Accounts payable	50,000	—	—
Other taxes payable	1,585,095	—	—
Other payables and accruals	46,800	—	—
Interest payable	11,384,841	—	—
Long-term borrowing due within one year	31,624,560	—	—
Total liabilities directly associated with assets held-for-sale	44,691,296	—	—

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INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2020

INVESTMENTS

Schedule of Investments in equity investees

The Group’s investments comprise the following:

				Share
				ownership as of
	December 31,	December 31,	December 31,	December 31,
	2019	2020	2020	2020
	RMB	RMB	US$
			( Note 3)
Investments accounted for under equity method:
ZTE9 Network Technology Co., Ltd., Wuxi (“ZTE9”)	—	—	—	5.00	%
System Link Corporation Limited ("System Link") <1>	—	—	—	—	%
Shanghai Big Data Cultures & Media Co., Ltd. (“Big Data”)	—	—	—	44.46	%
Maxline Holdings Limited (“Maxline”)	—	—	—	29.00	%
Leading Choice Holdings Limited (“Leading Choice”) <4>	—	—	—	—	%
Nanyang Herbs Pte. Ltd. ("Nanyang Herbs") <11>	—	—	—	50.00	%
Investments accounted for under cost method:
Shanghai Institute of Visual Art of Fudan University (“SIVA”) <8>	10,000,000	—	—	1.28	%
T3 Entertainment Co., Ltd. (“T3”) <2>	—	—	—	—	%
Smartposting Co, Ltd. (“Smartposting”)	—	—	—	14.55	%
Beijing Ti Knight Network Technology Co., Ltd. (“Beijing Ti Knight”)	—	—	—	9.90	%
Shanghai The9 Education Technology Co., Ltd. (“The9 Education Technology”)	—	—	—	19.20	%
Shanghai Ronglei Culture Communication Co., Ltd. (“Shanghai Ronglei”) <3>	—	—	—	—	%
Plutux Limited (“Plutux”) <9>	—	—	—	8.00	%
Zhenjiang Kexin Power System Design and Research Co., Ltd. (“Zhenjiang Kexin”) <5>	—	—	—	9.90	%
Shangdong Shanyeyunye Culture Co., Ltd. (“Shanyeyunye”) <6>	—	—	—	10.00	%
Beijing Weiming Naonao Technology Co., Ltd. (“BeijingNaonao”) <7>	—	—	—	9.09	%
FF Intelligent Mobility Global Holdings Ltd. ("FF Intelligent") <10>	—	—	—	0.156	%
Total	10,000,000	—	—

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PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables)

12 Months Ended

Dec. 31, 2020

PROPERTY, EQUIPMENT AND SOFTWARE, NET

Schedule of property, equipment and software and related accumulated depreciation and amortization

Property, equipment and software and related accumulated depreciation and amortization are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Office buildings	69,341,652	—	—
Computers and equipment	5,181,577	4,989,121	764,616
Leasehold improvements	9,359,857	—	—
Office furniture and fixtures	1,787,549	1,720,139	263,623
Motor vehicles	5,031,201	4,376,821	670,777
Software	14,542,095	10,511,865	1,611,014
Less: accumulated depreciation and amortization	(89,974,366)	(20,620,844)	(3,160,283)
Less: property, equipment and software, net, held-for-sale	(14,051,044)	—	—
Net book value	1,218,521	977,102	149,747

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LAND USE RIGHT, NET (Tables)

12 Months Ended

Dec. 31, 2020

LAND USE RIGHT, NET

Schedule of gross carrying amount, accumulated amortization and net book value of intangible asset

Gross carrying amount, accumulated amortization and net book value of land use rights are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Land use rights	85,160,348	—	—
Less: accumulated amortization	(24,011,374)	—	—
Less: land use right, net, held-for-sale	(61,148,974)	—	—
Net book value	—	—	—

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LEASES (Tables)

12 Months Ended

Dec. 31, 2020

LEASES

Schedule of items related to operating lease in consolidated balance sheet

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Operating lease right-of-use assets	9,257,604	5,149,090	789,133
Operating lease liabilities-current portion	3,407,670	3,787,210	580,415
Operating lease liabilities-non-current portion	6,251,705	2,464,495	377,700

Schedule of lease cost

	Classification in Consolidated
	Statements of Operations
	and Comprehensive (Loss) Gain	December 31, 2019	December 31, 2020	December 31, 2020
		RMB	RMB	US$
				(Note 3)
Operating lease cost	Operating expenses	1,606,340	3,539,374	542,433
Cost of other leases with terms less than one year	Operating expenses	82,232	67,281	10,311
Total		1,688,572	3,606,655	552,744

Schedule of maturities of operating lease liabilities

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Due within one year	3,779,845	3,995,768	612,378
Due in the second year	3,995,768	2,502,839	383,577
Due in the third year	2,502,839	—	—
Total lease payments	10,278,452	6,498,607	995,955
Less: imputed interest	(619,077)	(246,902)	(37,839)
Total	9,659,375	6,251,705	958,116

Schedule of supplemental cash flow information related to operating leases

	December 31, 2019	December 31, 2020	December 31, 2020
	RMB	RMB	US$
			(Note 3)
Cash paid for amounts included in the measurement of operating lease liabilities	1,271,769	2,842,464	435,627

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OTHER LONG-LIVED ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2020

OTHER LONG-LIVED ASSETS, NET

Schedule of other long-lived assets

Other long-lived assets are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Prepaid license fee	6,515,200	—	—
Prepaid deposit for joint venture	—	—	—
Total	6,515,200	—	—

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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2020

FAIR VALUE MEASUREMENTS

Schedule of changes in warrants liability measured at fair value on a recurring basis using significant level 3 inputs

In 2015, the Group issued warrants in connection with its convertible notes has the warrants have expired as of December 31, 2020. The warrants are recorded at fair market value at the date of issuance and subsequently at each reporting date. The following table presents the change in the warrants liability that were measured at fair value on a recurring basis using significant Level 3 inputs during 2019 and 2020 (see Note 19).

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Balance at beginning of year	1,490,844	198,600	30,437
Issuance of warrants	—	1,694,208	259,649
Fair value change on warrants liability recognized in other comprehensive income	(1,292,244)	(37,851)	(5,801)
Balance at the end of the year	198,600	1,854,957	284,285

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TAXATION (Tables)

12 Months Ended

Dec. 31, 2020

TAXATION

Schedule of composition of income tax expense

The current and deferred portions of income tax expense included in the consolidated statements of operations and comprehensive loss are as follows:

	For the year ended December 31,
	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Current income tax expense
PRC	—	—	7,165,097	1,098,099
Other jurisdictions	—	—	—	—
Deferred tax assets
PRC	(39,763,083)	(5,772,005)	25,905,564	3,970,201
Other jurisdictions	(19,816,235)	(15,151,553)	(44,312,311)	(6,791,159)
Subtotal	(59,579,318)	(20,923,558)	(18,406,747)	(2,820,958)
Change in valuation allowance
PRC	39,763,083	5,772,005	(25,905,564)	(3,970,201)
Other jurisdictions	19,816,235	15,151,553	44,312,311	6,791,159
Subtotal	59,579,318	20,923,558	18,406,747	2,820,958
Income tax expense	—	—	7,165,097	1,098,099

Schedule of reconciliation between statutory EIT rate and Group's effective tax rate

Reconciliation  between the statutory EIT rate and the Group’s effective tax rate is as follows:

	For the year ended		For the year ended		For the year ended
	December 31,		December 31,		December 31,
	2018		2019		2020
PRC statutory EIT rate	25	%	25	%	25	%
Effect of different tax rates in other jurisdictions	2	%	1	%	(10)	%
Change in future tax rate (upon expiration of preferential rate)	1	%	2	%	—	%
Change of prior year deferred tax assets	(11)	%	(15)	%	1	%
Change of valuation allowance	(2)	%	(18)	%	(10)	%
Income not subject to tax and non-deductible expenses, net	—	%	—	%	—	%
Effect of expired net operating loss	(15)	%	5	%	(6)	%
PRC withholding tax	—	%	—	%	2	%
Effective EIT rate	—	%	—	%	2	%

Schedule of significant components of deferred tax assets and liabilities

Significant components of deferred tax assets

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Temporary differences related to expenses and accruals	1,076,708	615,041	94,259
Temporary differences related to impairment on advances to suppliers	3,438,597	2,942,771	450,999
Temporary differences related to provision for doubtful accounts	1,078,742	689,811	105,718
Others	8,771,868	8,221,500	1,260,000
Temporary differences related to depreciation, amortization, and impairment of equipment and intangible assets	24,890,416	15,396,549	2,359,624
Startup expenses and advertising fees	199,704	212,880	32,625
Temporary differences related to research and development credits	1,120,850	1,057,050	162,000
Temporary differences related to equity investments	5,069,035	11,740,058	1,799,243
Foreign tax credits	—	—	—
Temporary differences related to provision for prepayment for equipment	5,000,000	5,000,000	766,284
Tax loss carry forwards	270,594,922	256,958,435	39,380,603
Total deferred tax assets	321,240,842	302,834,095	46,411,355
Less: Valuation allowance	(321,240,842)	(302,834,095)	(46,411,355)
Total deferred tax assets	—	—	—

Schedule of movement of valuation allowance on deferred tax assets

Movement of valuation allowance on deferred tax assets

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Beginning balance	342,164,400	321,240,842	49,232,313
Decrease in valuation allowance	(20,923,558)	(18,406,747)	(2,820,958)
Ending balance	321,240,842	302,834,095	46,411,355

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SHORT-TERM BORROWINGS (Tables)

12 Months Ended

Dec. 31, 2020

SHORT-TERM BORROWINGS

Schedule of short-term bank borrowings

Short-term borrowings are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Pledged loan	82,645,089	—	—
Interest-free loan	34,881,000	—	—
Long-term borrowing due within one year	31,624,560	—	—
Less: borrowing classified as held for sale	(31,624,560)	—	—
Total	117,526,089	—	—

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities are as follows:

	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Funds raised for CrossFire New Mobile Game	57,499,910	56,311,274	8,630,080
Professional services	11,844,738	9,866,284	1,512,074
Agency commission fees payable	—	6,397,096	980,398
Staff cost related payables	9,851,024	3,842,856	588,943
Office expenses	3,543,495	1,920,735	294,365
Product development services	906,906	848,237	129,998
Other payables	3,540,000	—	—
Utility fees	1,646,394	—	—
Others	4,308,376	4,384,391	671,937
Total	93,140,843	83,570,873	12,807,795

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WARRANTS (Tables)

12 Months Ended

Dec. 31, 2020

WARRANTS

Schedule of warrants on convertible notes are exercisable at any time after commitment date to purchase shares of the Group's ADS

The warrants on convertible notes are exercisable at any time after the commitment date to purchase up to 4,778,846 shares of the Company’s ADS as follows:

Warrants	Principal Amount		Exercise Price
Tranche I	US$	5,000,000	US$	1.50
Tranche A	US$	2,750,000	US$	2.60
Tranche B	US$	1,650,000	US$	5.20
Tranche C	US$	550,000	US$	7.80

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SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2020

Stock Options

Schedule of share option activities

The following table summarizes the Group’s share option activities with its employees and directors:

				Weighted-Average
				Remaining
	Number of	Weighted-Average		Contractual Term	Aggregate
	Options	Exercise Price		(years)	Intrinsic Value
Outstanding as of January 1, 2020	50,000	US$	0.93	3.07	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	—		—	—	Nil
Outstanding as of December 31, 2020	50,000	US$	0.93	2.07	Nil
Vested and expected to vest as of December 31, 2020	50,000	US$	0.93	2.07	Nil
Exercisable as of December 31, 2020	50,000	US$	0.93	2.07	Nil

Schedule of fair value of options valuation assumptions

The fair value of the share options was measured on the respective grant dates based on the Black-Scholes option pricing model, with below assumptions made regarding expected term and volatility, risk-free interest rate and dividend yield:

Risk-free interest rate		2.19	%
Expected life (years)		2.93
Expected dividend yield		—	%
Volatility		78.55	%
Fair value of options at grant date	US$	0.51

Performance conditions

Schedule of share option activities

The following table summarizes the share option activities subject to performance condition:

				Weighted-Average
				Remaining
	Number of	Weighted-Average		Contractual Term	Aggregate Intrinsic
	Options	Exercise Price		(years)	Value
Outstanding as of January 1, 2020	1,000,000	US$	0.93	3.07	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	(1,000,000)	US$	0.93	—	Nil
Outstanding as of December 31, 2020	—		—	0	Nil
Vested and expected to vest as of December 31, 2020	—		—	0	Nil
Exercisable as of December 31, 2020	—		—	—	Nil

Schedule of fair value of options valuation assumptions

The fair value of the awards that are based on the performance condition was calculated using the Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate		2.19	%
Expected life (years)		2.93
Expected dividend yield		—	%
Volatility		78.55	%
Fair value of options at grant date	US$	0.51

Stock options and ordinary shares granted by Red 5

Schedule of share option activities

The following table summarizes the Red 5’s share option activities with its employees and directors:

				Weighted-Average
		Weighted-Average		Remaining
	Number of	Exercise Price per		Contractual Term	Aggregate
	Options	Option		(years)	Intrinsic Value
Outstanding as of January 1, 2020	5,111,250	US$	0.049	1.24	Nil
Granted	—		—	—	Nil
Exercised	—		—	—	Nil
Forfeited	—		—		Nil
Outstanding as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil
Vested and expected to vest as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil
Exercisable as of December 31, 2020	5,111,250	US$	0.049	0.24	Nil

Schedule of fair value of options valuation assumptions

Risk-free interest rate	0.78	%
Expected life (years)	4.00
Expected dividend yield	0.00	%
Volatility	45.70	%

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(LOSS) INCOME PER SHARE (Tables)

12 Months Ended

Dec. 31, 2020

(LOSS) INCOME PER SHARE

Schedule of loss per share calculation

Loss per share is calculated as follows:

	For the year	For the year	For the year	For the year
	ended December	ended December	ended December	ended December
	31, 2018	31, 2019	31, 2020	31, 2020
	RMB	RMB	RMB	US$
				(Note 3)
Numerator:
Net (loss) income attributable to ordinary shareholders before change in redeemable noncontrolling interest	(217,092,926)	(177,795,168)	397,883,388	60,978,298
Change in redeemable noncontrolling interest	(40,918,773)	(12,827,598)	(1,190,122)	(182,394)
Net (loss) income attributable to ordinary shareholders	(258,011,699)	(190,622,766)	396,693,266	60,795,904
Denominator:
Denominator for basic and diluted (loss) income per share – weighted-average shares outstanding	62,114,760	106,407,008	163,599,920	163,599,920
Net (loss) income attributable to holders of ordinary shares per share
- Basic and diluted	(4.15)	(1.79)	2.42	0.37

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NONCONTROLLING INTEREST (Tables)

12 Months Ended

Dec. 31, 2020

NONCONTROLLING INTEREST

Schedule of effects of changes in ownership interest of subsidiaries

As of December 31, 2019, the Group’s noncontrolling interests mainly included equity interest in Red 5 and equity awards granted as compensation by the Group’s subsidiaries. The following schedule shows the effects of changes in the ownership interest of The9 Limited in its subsidiaries on equity attributed to The9 Limited for the years ended December 31, 2018, 2019 and 2020.

	December 31,	December 31,	December 31,	December 31,
	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Net (loss) income attributable to The9 Limited	(217,092,926)	(177,795,168)	397,883,388	60,978,299
Transfers (to) from the noncontrolling interest:
Change in The9 Limited’s additional paid-in capital for adjustment on noncontrolling interest as a result of issuance of common shares of Red 5 upon vesting of stock options and restricted shares (1)	—	—	—	—
Change from net (loss) income attributable to The9 Limited and transfers to noncontrolling interests	(217,092,926)	(177,795,168)	397,883,388	60,978,299

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REDEEMABLE NONCONTROLLING INTEREST (Tables)

12 Months Ended

Dec. 31, 2020

REDEEMABLE NONCONTROLLING INTEREST

Schedule of holders of SBPS

The holders of SBPS were as follows:

	December 31,	December 31,
Holder	2019	2020
	Number of	Number of
	Shares	Shares
L&A International Holdings Limited	10,180,553	10,180,553
Shanghai Oriental Pearl Culture Development Co., Ltd.	17,258,399	17,258,399

Schedule of reconciliation of redeemable noncontrolling interest

A reconciliation of redeemable noncontrolling interest is as follows:

	For the year ended	For the year ended	For the year ended
	December 31,	December 31,	December 31,
	2019	2020	2020
	RMB	RMB	US$
			(Note 3)
Redeemable noncontrolling interest opening balance	341,074,539	349,046,548	53,493,724
Net loss attributable to redeemable noncontrolling interest	(4,855,589)	(1,190,122)	(182,394)
Change in redeemable noncontrolling interest	12,827,598	1,190,122	182,394
Redeemable noncontrolling interest ending balance	349,046,548	349,046,548	53,493,724

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SEGMENT REPORTING (Tables)

12 Months Ended

Dec. 31, 2020

SEGMENT REPORTING

Schedule of geographic area information includes revenue

The following geographic area information includes net revenues based on location of players for the years ended December 31, 2018, 2019 and 2020:

	2018	2019	2020	2020
	RMB	RMB	RMB	US$
				(Note 3)
Greater China	16,430,205	182,107	625,488	95,860
Other areas	1,001,653	159,388	—	—
Total	17,431,858	341,495	625,488	95,860

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ORGANIZATION AND NATURE OF OPERATIONS (Details)	12 Months Ended
	Dec. 31, 2020
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Entity Incorporation, State or Country Code	F4
GameNow.net (Hong Kong) Ltd ("GameNow Hong Kong")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2000-01
Place of registration	Hong Kong
Legal Ownership	100.00%
China The9 Interactive Limited ("C9I")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2003-10
Place of registration	Hong Kong
Legal Ownership	100.00%
China The9 Interactive (Beijing) Ltd ("C9I Beijing")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2007-03
Place of registration	PRC
Legal Ownership	100.00%
JiuTuo (Shanghai) Information Technology Ltd ("Jiu Tuo")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2007-07
Place of registration	PRC
Legal Ownership	100.00%
China Crown Technology Ltd ("China Crown Technology")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2007-11
Place of registration	Hong Kong
Legal Ownership	100.00%
Asian Way Development Ltd ("Asian Way")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2007-11
Place of registration	Hong Kong
Legal Ownership	100.00%
New Star International Development Ltd ("New Star")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2008-01
Place of registration	Hong Kong
Legal Ownership	100.00%
Red 5 Studios, Inc. ("Red 5")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2005-06
Place of registration	USA
Legal Ownership	34.71%
Red 5 Singapore Pte. Ltd. ("Red 5 Singapore")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2010-04
Place of registration	Singapore
Legal Ownership	34.71%
The9 Interactive, Inc. ("The9 Interactive")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2010-06
Place of registration	USA
Legal Ownership	100.00%
Jiu Gang
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2014-12
Place of registration	PRC
Legal Ownership	100.00%
The9 Singapore Pte ltd ("The9 Singapore")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2010-04
Place of registration	Singapore
Legal Ownership	100.00%
Ninebit Inc. ("Ninebit")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2018-01
Place of registration	Cayman Islands
Legal Ownership	100.00%
1111 Limited ("1111")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2018-01
Place of registration	Hong Kong
Legal Ownership	100.00%
Supreme Exchange Limited ("Supreme")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2018-12
Place of registration	Malta
Legal Ownership	90.00%
BET 111 Ltd. ("Bet 111")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-01
Place of registration	Malta
Legal Ownership	90.00%
Coin Exchange Ltd ("Coin")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-01
Place of registration	Malta
Legal Ownership	90.00%
The9 EV Limited
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-05
Place of registration	Hong Kong
Legal Ownership	100.00%
NBTC Limited
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-06
Place of registration	Hong Kong
Legal Ownership	100.00%
FF The9 China JointVentureLimited
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-09
Place of registration	Hong Kong
Legal Ownership	50.00%
Huiling Computer Technology Consulting (Shanghai) Co.Ltd.
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-03
Place of registration	PRC
Legal Ownership	100.00%
Leixian Information Technology (Shanghai) Ltd.
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2019-03
Place of registration	PRC
Legal Ownership	100.00%
Shanghai The9 Information Technology Co., Ltd. ("Shanghai IT")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2000-09
Place of registration	PRC
Shanghai Jiushi Interactive Network Technology Co., Ltd. ("Jiushi")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2011-07
Place of registration	PRC
Legal Ownership	80.00%
Shanghai ShencaiChengjiu Information Technology co., Ltd. ("SH Shencai")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2015-05
Place of registration	PRC
Legal Ownership	60.00%
Wuxi Interest Dynamic Network Technology Co Ltd ("Wuxi Qudong")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2016-06
Place of registration	PRC
Legal Ownership	100.00%
Changsha Quxiang Network Technology Co Ltd
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2016-07
Place of registration	PRC
Legal Ownership	100.00%
Silver Express Investments Ltd. ("Silver Express")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2007-11
Place of registration	Hong Kong
Legal Ownership	100.00%
City Channel Ltd. ("City Channel")
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Date of registration	2006-06
Place of registration	Hong Kong
Legal Ownership	100.00%

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PRINCIPAL ACCOUNTING POLICIES - Estimated useful life (Details)	12 Months Ended
	Dec. 31, 2020
Leasehold improvements
Property, equipment and software, net
Property plant and equipment, useful life	Shorter of respective lease term or estimated useful life
Computer and equipment | Minimum
Property, equipment and software, net
Property plant and equipment, useful life	3 years
Computer and equipment | Maximum
Property, equipment and software, net
Property plant and equipment, useful life	4 years
Software
Property, equipment and software, net
Property plant and equipment, useful life	5 years
Office furniture and fixtures
Property, equipment and software, net
Property plant and equipment, useful life	3 years
Motor vehicles
Property, equipment and software, net
Property plant and equipment, useful life	5 years
Office buildings | Minimum
Property, equipment and software, net
Property plant and equipment, useful life	10 years
Office buildings | Maximum
Property, equipment and software, net
Property plant and equipment, useful life	20 years

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PRINCIPAL ACCOUNTING POLICIES - Additional Information (Details)	1 Months Ended				12 Months Ended
	Feb. 28, 2021 USD ($) $ / shares shares	Jan. 31, 2021 shares	Oct. 31, 2020 USD ($) $ / shares shares	Sep. 30, 2019 subsidiary	Dec. 31, 2020 USD ($) segment	Dec. 31, 2020 CNY (¥) segment	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2017 CNY (¥)	Dec. 31, 2016 shares	Dec. 31, 2009 $ / shares
PRINCIPAL ACCOUNTING POLICIES
Accumulated deficit					$ (458,578,915)				¥ (2,992,227,421)		¥ (3,410,856,231)
Current liabilities exceeded total assets					48,400,000				315,900,000
Exercise Price | $ / shares														$ 19.50
Net proceeds					7,268,995	¥ 47,430,195	¥ 0	¥ 0
Cash equivalents, bank deposits | $					4,600,000					$ 350,000
Cash and cash equivalents					4,857,661			4,256,449	31,696,237	$ 1,549,907	10,113,141	¥ 142,624,020
Allowance for doubtful accounts receivable					15,862	103,501	169,416	109,939
Allowance for doubtful accounts written off					300,000	2,100,000	3,200,000	22,200,000
Advertising expenses					20,000	100,000	200,000	300,000
Unrestricted government subsidies from local government					$ 20,000	¥ 100,000	¥ 1,200,000	¥ 1,600,000
Deferred Revenue | ¥									0		200,000
Number of subsidiaries disposed off | subsidiary				3
Number of operating segment | segment					1	1
Share Offering
PRINCIPAL ACCOUNTING POLICIES
Net proceeds | $			$ 8,100,000
Share Offering | Class A Ordinary Shares
PRINCIPAL ACCOUNTING POLICIES
Number of shares issued			70,500,000
Number of shares represented by each ADS			30
Share Offering | ADS
PRINCIPAL ACCOUNTING POLICIES
Number of warrants issued			27,025,000
Number of shares called by warrants			2,702,500
Number of shares called by each warrant			0.1
Over-allotment option | ADS
PRINCIPAL ACCOUNTING POLICIES
Number of shares issued			3,525,000
Number of shares called by warrants			352,500
Exercise Price | $ / shares			$ 3.70
Representative warrants | Share Offering | Class A Ordinary Shares
PRINCIPAL ACCOUNTING POLICIES
Number of shares represented by each ADS			30
Representative warrants | Share Offering | ADS
PRINCIPAL ACCOUNTING POLICIES
Number of shares called by warrants			117,500
Exercise Price | $ / shares			$ 4.07
Controlled by PRC State Administration for Foreign Exchange, under authority of People's Bank of China
PRINCIPAL ACCOUNTING POLICIES
Cash and cash equivalents					$ 200,000				¥ 1,100,000		¥ 7,600,000
Red 5 Studios, Inc. ("Red 5")
PRINCIPAL ACCOUNTING POLICIES
Share ownership for investments accounted for under equity method (as a percent)					34.71%				34.71%
Subsequent Event | Class A Ordinary Shares
PRINCIPAL ACCOUNTING POLICIES
Number of shares issued		8,108,100
Number of warrants issued		207,891,840
Subsequent Event | ADS
PRINCIPAL ACCOUNTING POLICIES
Authorized shares to shell	100,000,000
Period to sell authorized shares	36 months
Subsequent Event | Convertible notes issued to Iliad
PRINCIPAL ACCOUNTING POLICIES
Conversion Price | $ / shares	$ 14.00
Subsequent Event | Convertible notes issued to Streeterville, one
PRINCIPAL ACCOUNTING POLICIES
Threshold amount for redemption per calendar month | $	$ 840,000
Redemption premium percentage	10.00%
Prepayment premium percentage	15.00%
Number of days in a year considered for interest rate determination | $	360
Period for exercising the right to convert	6 months
Term of convertible note (in years)	1 year
Subsequent Event | Convertible notes issued to Streeterville, one | Class A Ordinary Shares
PRINCIPAL ACCOUNTING POLICIES
Number of shares represented by each ADS	30
Repurchase price of shares | $ / shares	$ 0.0001
Ordinary shares	10,000,000
Aggregate consideration | $	$ 5,000,000
Subsequent Event | Convertible notes issued to Streeterville, one | ADS
PRINCIPAL ACCOUNTING POLICIES
Ordinary shares	50,000
Subsequent Event | Convertible notes issued to Streeterville, one | Convertible notes issued to Iliad
PRINCIPAL ACCOUNTING POLICIES
Principal amount | $	$ 5,000,000
Interest rate (as a percent)	6.00%
Conversion Price | $ / shares	$ 14
Minimum
PRINCIPAL ACCOUNTING POLICIES
Share-based awards vesting period					1 year	1 year
Maximum
PRINCIPAL ACCOUNTING POLICIES
Number of shares called by warrants													4,778,846
Share-based awards vesting period					4 years	4 years
Land use right
PRINCIPAL ACCOUNTING POLICIES
Intangible Assets, useful life					44 years	44 years

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CONVENIENCE TRANSLATION (Details)	Dec. 31, 2020
CONVENIENCE TRANSLATION
Exchange rates used to translate amounts from RMB to US$	6.5250

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VARIABLE INTEREST ENTITIES (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)
VARIABLE INTEREST ENTITIES
Total assets	$ 7,423,955		¥ 181,459,156		¥ 48,441,307
Total liabilities	56,220,273		1,064,334,300		366,837,286
Revenue	95,860	¥ 625,488	343,077	¥ 17,492,415
Net loss	60,978,298	397,883,388	(177,795,168)	(217,092,926)
Variable Interest Entity, Primary Beneficiary | Before elimination of intercompany balances and transactions
VARIABLE INTEREST ENTITIES
Total assets	1,587,330		150,615,709		10,357,329
Total liabilities	48,062,664		423,900,573		¥ 313,608,879
Revenue	95,860	625,488	182,119	16,567,372
Net loss	$ (8,032,199)	¥ (52,410,094)	¥ (51,667,515)	¥ (49,024,050)

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VARIABLE INTEREST ENTITIES - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
VARIABLE INTEREST ENTITIES
Percentage of operating profit generated by the VIEs	90.00%
Initial term of exclusive technical service agreement	20 years
VIEs contribution on net revenue	100.00%	53.30%	95.00%
VIEs account on total assets	21.40%	83.00%
VIEs account on total liabilities	85.50%	39.80%

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ADVANCES TO SUPPLIERS (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Advances to suppliers
Advances to suppliers	$ 4,249	¥ 27,725	¥ 11,246,608
Advance to subscribe tokens
Advances to suppliers
Advances to suppliers			10,094,972
Company registration fee
Advances to suppliers
Advances to suppliers			794,692
Advertising Fee
Advances to suppliers
Advances to suppliers			255,259
Others
Advances to suppliers
Advances to suppliers	$ 4,249	¥ 27,725	¥ 101,685

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ADVANCES TO SUPPLIERS - Additional Information (Detail) ¥ in Millions			1 Months Ended						12 Months Ended
	Feb. 06, 2018 USD ($)	Feb. 06, 2018 CNY (¥)	Sep. 30, 2020 USD ($)	Jul. 31, 2020 USD ($)	Jul. 31, 2019 USD ($)	Jul. 31, 2019 CNY (¥)	Oct. 31, 2016 USD ($)	Oct. 31, 2016 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)
Advances to suppliers
Funds required for the development of CrossFire new mobile game				$ 800,000
Number of tokens subscribed	5,297,157			3,075,035					2,222,222
Advance Paid For Administrative Expenses	$ 300,000	¥ 2.1
Payments for subscription of tokens	$ 2,000,000
Refund recievable on termination of tokens									$ 400,000						¥ 2.8
Maximum period of agreement term			3 years
Minimum guarantee payment			$ 13,000,000
Upfront payment			$ 3,000,000
Impairment on advances to suppliers									3,200,000	¥ 20.7	$ 900,000	¥ 6.0		¥ 7.8
Inner Mongolia Culture Assets and Equity Exchange | CrossFire New Mobile Game
Advances to suppliers
Financing service fee paid					$ 1,100,000	¥ 6.9	$ 1,100,000	¥ 7.5	1,100,000	¥ 7.5
Funds required for the development of CrossFire new mobile game									$ 24,100,000						¥ 157.5
Non recovery of advance financing fee													$ 15,300,000	¥ 100.0
Number of tokens subscribed					2,222,222

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PREPAYMENTS AND OTHER CURRENT ASSETS, NET (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
PREPAYMENTS AND OTHER CURRENT ASSETS, NET
Receivable from subscribe tokens	$ 400,000	¥ 2,800,000
Employee advances	351,372	2,292,700	¥ 1,648,197
Prepayments and deposits	237,719	1,551,118	1,488,463
Input VAT recoverable	272,871	1,780,484	1,441,700
Refundable withholding tax			1,297,016
Other receivables, net of allowance for doubtful accounts of RMB5,343,427 and RMB6,619,312 as of December 31, 2019 and 2020, respectively	648,454	4,231,165	2,973,158
Prepayments and other current assets, total	$ 1,510,416	9,855,467	8,848,534
Other receivables, allowance for doubtful accounts		¥ 6,619,312	¥ 5,343,427

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ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE - Additional Information (Details)					1 Months Ended	12 Months Ended
	May 29, 2020 USD ($)	Feb. 21, 2020 USD ($)	Feb. 21, 2020 CNY (¥)	Sep. 26, 2019 USD ($) subsidiary	Sep. 30, 2019 subsidiary	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Sep. 26, 2019 CNY (¥)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of subsidiaries disposed of					3
Gain (Loss) on Disposition of Stock in Subsidiary						$ 72,887,173	¥ 475,588,803	¥ 1,206,925	¥ 10,473,159
12% Convertible Senior Notes Due 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayment of convertible notes | $	$ 50,000,000
The9 Computer, C9I Shanghai and Shanghai Kaie
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of subsidiaries disposed of				3
The9 Computer, C9I Shanghai and Shanghai Kaie | Held for sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total consideration				$ 75,600,000						¥ 493,000,000
Gain (Loss) on Disposition of Stock in Subsidiary		$ 60,000,000	¥ 391,800,000

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ASSETS HELD-FOR-SALE AND LIABILITIES HELD-FOR-SALE (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Assets classified as held-for-sale
Total assets classified as held-for-sale	$ 0	¥ 0	¥ 123,390,350
Liabilities directly associated with assets held-for-sale
Long-term borrowing due within one year			(31,624,560)
Total liabilities directly associated with assets held-for-sale	$ 0	0	¥ 44,691,296
The9 Computer, C9I Shanghai and Shanghai Kaie | Held for sale
Assets classified as held-for-sale
Cash and cash equivalents		43,027,475
Prepayments and other current assets		5,162,857
Property, equipment and software, net		14,051,044
Land use rights, net		61,148,974
Total assets classified as held-for-sale		123,390,350
Liabilities directly associated with assets held-for-sale
Accounts payable		50,000
Other taxes payable		1,585,095
Other payables and accruals		46,800
Interest payable		11,384,841
Long-term borrowing due within one year		31,624,560
Total liabilities directly associated with assets held-for-sale		¥ 44,691,296

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INVESTMENTS (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Schedule of Investments [Line Items]
Investments in equity investees				¥ 10,000,000
Leading Choice
Schedule of Investments [Line Items]
Equity Investment Percentage of Ownership Interest Disposed		20.00%	20.00%
Proceeds From Ownership Interest Disposed | $		$ 30
Equity Securities, FV-NI, Realized Gain (Loss)		$ 30	¥ 200,000
ZTE9 Network Technology Co., Ltd., Wuxi ("ZTE9")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under equity method (as a percent)		5.00%	5.00%
Shanghai Big Data Cultures Media Co
Schedule of Investments [Line Items]
Share ownership for investments accounted for under equity method (as a percent)		44.46%	44.46%
Maxline Holdings Limited Maxline
Schedule of Investments [Line Items]
Share ownership for investments accounted for under equity method (as a percent)		29.00%	29.00%
Nanyang Herbs Pte. Ltd. ("Nanyang Herbs")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under equity method (as a percent)		50.00%	50.00%
Shanghai Institute of Visual Art of Fudan University ("SIVA")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		1.28%	1.28%
Cost method investments				¥ 10,000,000
Smartposting Co, Ltd.
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		14.55%	14.55%
Beijing Ti Knight Network Technology Co., Ltd. ("Beijing Ti Knight")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		9.90%	9.90%
Shanghai The9 Education Technology Co., Ltd. ("The9 Education Technology")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		19.20%	19.20%
Plutux Limited ("Plutux")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		8.00%	8.00%
Plutux Limited ("Plutux") | Leading Choice
Schedule of Investments [Line Items]
Proceeds From Ownership Interest Disposed			¥ 200,000
Zhenjiang Kexin Power System Design and Research Co., Ltd. ("Zhenjiang Kexin")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)	9.90%	9.90%	9.90%
Shangdong ShanYeYunYe Culture Co., Ltd ("Shanyeyunye")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		10.00%	10.00%
Beijing Weiming Naonao Technology Co., Ltd ("BeijingNaoNao")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		9.09%	9.09%
FF Intelligent Mobility Global Holdings Ltd. ("FF Intelligent")
Schedule of Investments [Line Items]
Share ownership for investments accounted for under cost method (as a percent)		0.156%	0.156%

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INVESTMENTS - Additional Information (Details) ₩ in Millions		1 Months Ended											12 Months Ended
	Apr. 09, 2020	Nov. 30, 2020 USD ($) shares	Aug. 31, 2020 USD ($)	Aug. 31, 2020 CNY (¥)	Feb. 29, 2020 USD ($)	Feb. 29, 2020 CNY (¥)	Jul. 31, 2019 KRW (₩)	Jul. 31, 2019 USD ($)	Jul. 31, 2019 CNY (¥)	Jun. 30, 2019 shares	Sep. 30, 2018 USD ($) shares	Sep. 30, 2018 CNY (¥) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)	Aug. 31, 2020 CNY (¥)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Apr. 30, 2019 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CNY (¥)
Subsidiary, Sale of Stock [Line Items]
Impairment of investment													$ 2,758,621	¥ 18,000,000		¥ 3,791,039	¥ 7,776,157
Income (Loss) from Equity Method Investments													(331,944)	(2,165,935)		(2,847,260)	(4,292,887)
Payment for equity fund investment													$ 511,677	¥ 3,338,690		0	0
Percentage of issued and outstanding share capital Sold	100.00%
Proceeds from disposal of equity method investees | ¥																694,628	0
Leading Choice
Subsidiary, Sale of Stock [Line Items]
Equity Investment Percentage of Ownership Interest Disposed													20.00%	20.00%
Proceeds from ownership interest disposed | $													$ 30,000
Gain on disposal													30,000	¥ 200,000
Shanyeyunye
Subsidiary, Sale of Stock [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners																				10.00%	10.00%
Impairment of investment													800,000	5,000,000
Cost method investment																				$ 800,000	¥ 5,000,000
BeijingNaonao
Subsidiary, Sale of Stock [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners			9.09%																9.09%
Impairment of investment			$ 500,000	¥ 3,000,000
Cost method investments, original cost including transaction cost			$ 500,000																¥ 3,000,000
SIVA
Subsidiary, Sale of Stock [Line Items]
Impairment of investment													1,500,000	10,000,000
Plutux
Subsidiary, Sale of Stock [Line Items]
Impairment of investment											$ 200,000	¥ 1,400,000
Equity method investment ownership ( as a percentage)											8.00%	8.00%
Smart King
Subsidiary, Sale of Stock [Line Items]
Cost method investment | $		$ 5,000,000																					$ 5,000,000
Smart King | Class B ordinary shares
Subsidiary, Sale of Stock [Line Items]
Common stock issued		2,994,011
Nanyang Herbs
Subsidiary, Sale of Stock [Line Items]
Impairment of investment					$ 200,000	¥ 1,200,000
Income (Loss) from Equity Method Investments													300,000	2,200,000		2,800,000	4,300,000
Equity method investment ownership ( as a percentage)					50.00%	50.00%
Cost method investment													500,000					¥ 3,300,000
Impairment in equity and other investments													$ 2,900,000	¥ 19,200,000		8,500,000	¥ 9,200,000
Shanghai Big Data Cultures Media Co
Subsidiary, Sale of Stock [Line Items]
Equity method investment ownership ( as a percentage)													44.46%					44.46%
T3 Entertainment Company Ltd
Subsidiary, Sale of Stock [Line Items]
Total consideration							₩ 6,092.8	$ 5,200,000
Gain on disposal								$ 1,600,000	¥ 10,400,000
Smartposting Co, Ltd.
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments													14.55%	14.55%
Beijing Ti Knight Network Technology Co., Ltd. ("Beijing Ti Knight")
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments													9.90%	9.90%
Maxline Holdings Limited Maxline
Subsidiary, Sale of Stock [Line Items]
Equity method investment ownership ( as a percentage)													29.00%					29.00%
Leading Choice Holdings Limited
Subsidiary, Sale of Stock [Line Items]
Common Stock, Shares Subscribed but Unissued											21,000,000	21,000,000
Shanghai The9 Education Technology Co., Ltd. ("The9 Education Technology")
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments													19.20%	19.20%
Shanghai Ronglei Culture Communication Co., Ltd. ("Shanghai Ronglei")
Subsidiary, Sale of Stock [Line Items]
Impairment of investment															$ 600,000	4,000,000
Proceeds from disposal of equity method investees															500,000	¥ 3,000,000
Cost method investment															$ 600,000							¥ 4,000,000		$ 800,000	¥ 5,000,000
Plutux Limited ("Plutux")
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments													8.00%	8.00%
Plutux Limited ("Plutux") | Plutux Limited ("Plutux")
Subsidiary, Sale of Stock [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners											20.00%	20.00%
Plutux Limited ("Plutux") | Leading Choice
Subsidiary, Sale of Stock [Line Items]
Proceeds from ownership interest disposed | ¥														¥ 200,000
Zhenjiang Kexin Power System Design and Research Co., Ltd. ("Zhenjiang Kexin")
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments										9.90%			9.90%	9.90%
Common Stock, Shares Subscribed but Unissued										3,444,882
Shanghai Institute of Visual Art of Fudan University ("SIVA")
Subsidiary, Sale of Stock [Line Items]
Ownership Percentage Under Cost Method Investments													1.28%	1.28%

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PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Property, equipment and software, net
Less: accumulated depreciation and amortization	$ (3,160,283)	¥ (20,620,844)	¥ (89,974,366)
Property, equipment and software, net, held for sale	0	0	(14,051,044)
Property plant and equipment, net	149,747	977,102	1,218,521
Office buildings
Property, equipment and software, net
Property plant and equipment, gross			69,341,652
Computer and equipment
Property, equipment and software, net
Property plant and equipment, gross	764,616	4,989,121	5,181,577
Leasehold improvements
Property, equipment and software, net
Property plant and equipment, gross			9,359,857
Office furniture and fixtures
Property, equipment and software, net
Property plant and equipment, gross	263,623	1,720,139	1,787,549
Motor vehicles
Property, equipment and software, net
Property plant and equipment, gross	670,777	4,376,821	5,031,201
Software
Property, equipment and software, net
Property plant and equipment, gross	$ 1,611,014	¥ 10,511,865	¥ 14,542,095

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PROPERTY, EQUIPMENT AND SOFTWARE, NET - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
PROPERTY, EQUIPMENT AND SOFTWARE, NET
Depreciation and amortization of property, equipment and software	$ 68,626	¥ 400,000	¥ 2,778,778	¥ 3,650,261
Gain (Loss) on Disposition of Property Plant Equipment	$ 10,000	¥ 30,000	¥ 2,200,000	¥ 200,000

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LAND USE RIGHT, NET (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
LAND USE RIGHT, NET
Land use right	$ 0	¥ 0	¥ 85,160,348
Less: accumulated amortization	0	0	(24,011,374)
Less: land use right, net, held-for-sale	0	0	¥ (61,148,974)
Net book value	$ 0	¥ 0

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LAND USE RIGHT, NET - Additional Information (Details) - CNY (¥)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
LAND USE RIGHT, NET
Amortization of land use right	¥ 0	¥ 1,440,682	¥ 1,920,910

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LEASES - Operating leases recognized in balance sheet (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
LEASES
Operating lease right-of-use assets	$ 789,133	¥ 5,149,090	¥ 9,257,604
Operating lease liabilities-current portion	580,415	3,787,210	3,407,670
Operating lease liabilities-non-current portion	$ 377,700	¥ 2,464,495	¥ 6,251,705

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LEASES - Lease cost (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
LEASES
Operating lease cost	$ 542,433	¥ 3,539,374	¥ 1,606,340
Cost of other leases with terms less than one year	10,311	67,281	82,232
Total	$ 552,744	¥ 3,606,655	¥ 1,688,572

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LEASES - Maturities of operating lease liabilities (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
LEASES
Due within one year	$ 612,378	¥ 3,995,768	¥ 3,779,845
Due in the second year	383,577	2,502,839	3,995,768
Due in the third year			2,502,839
Total lease payments	995,955	6,498,607	10,278,452
Less: imputed interest	(37,839)	(246,902)	(619,077)
Total	$ 958,116	¥ 6,251,705	¥ 9,659,375

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LEASES - Operating lease costs (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2020	Dec. 31, 2019
LEASES
Prepaid rental expense	¥ 0	¥ 10

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OTHER LONG-LIVED ASSETS, NET (Details)	1 Months Ended			12 Months Ended
	Nov. 30, 2020 USD ($) shares	Apr. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)
Schedule of Other Assets [Line Items]
Prepaid license fee				$ 0			¥ 6,515,200		¥ 0
Prepaid deposit for joint venture				0			0		0
Total				0			6,515,200		¥ 0
Impairment of prepaid license fee				1,000,000	¥ 6,500,000
Initial deposit paid for investments		$ 5,000,000					34,881,000	¥ 0
Initial deposit for joint venture arrangement		$ 5,000,000					34,881,000	¥ 0
Impairment loss on joint venture arrangement				$ 998,498	¥ 6,515,200	$ 5,300,000	¥ 34,881,000
FF Intelligent Mobility Global Holdings Ltd. ("FF Intelligent")
Schedule of Other Assets [Line Items]
Initial deposit paid for investments	$ 5,000,000		$ 5,000,000
Number of Class B ordinary shares into which the initial deposit was converted | shares	2,994,011		2,994,011
Initial deposit for joint venture arrangement	$ 5,000,000		$ 5,000,000

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FAIR VALUE MEASUREMENTS (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
Change in warrants liability that were measured at fair value on a recurring basis using significant Level 3 inputs
Balance at beginning of year	$ 30,437	¥ 198,600	¥ 1,490,844
Issuance of warrants	259,649	1,694,208
Fair value change on warrants liability recognized in other comprehensive income	(5,801)	(37,851)	(1,292,244)
Balance at the end of the year	$ 284,285	¥ 1,854,957	¥ 198,600

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TAXATION - Composition of income tax expense (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Income Taxes [Line Items]
Deferred taxation	$ (2,820,958)	¥ (18,406,747)	¥ (20,923,558)	¥ (59,579,318)
Change in valuation allowance	2,820,958	18,406,747	20,923,558	59,579,318
Income tax benefit	1,098,099	7,165,097	0	0
Domestic tax authority
Income Taxes [Line Items]
Current income tax (expense) benefit	1,098,099	7,165,097	0	0
Deferred taxation	3,970,201	25,905,564	(5,772,005)	(39,763,083)
Change in valuation allowance	(3,970,201)	(25,905,564)	5,772,005	39,763,083
Foreign tax authority
Income Taxes [Line Items]
Current income tax (expense) benefit	0	0	0	0
Deferred taxation	(6,791,159)	(44,312,311)	(15,151,553)	(19,816,235)
Change in valuation allowance	$ 6,791,159	¥ 44,312,311	¥ 15,151,553	¥ 19,816,235

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TAXATION - Reconciliation (Details)	1 Months Ended	12 Months Ended
	Dec. 22, 2017	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
TAXATION
PRC statutory EIT rate	34.00%	25.00%	25.00%	25.00%
Effect of different tax rates in other jurisdictions		(10.00%)	1.00%	2.00%
Change in future tax rate (upon expiration of preferential rate)			2.00%	1.00%
Change of prior year deferred tax assets		1.00%	(15.00%)	(11.00%)
Change of valuation allowance		(10.00%)	(18.00%)	(2.00%)
Effect of expired net operating loss		(6.00%)	5.00%	(15.00%)
PRC withholding tax		2.00%
Effective EIT rate		2.00%

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TAXATION - Components of deferred tax assets (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
TAXATION
Temporary differences related to expenses and accruals	$ 94,259	¥ 615,041		¥ 1,076,708
Temporary differences related to impairment on advances to suppliers	450,999	2,942,771		3,438,597
Temporary differences related to provision for doubtful accounts	105,718	689,811		1,078,742
Others	1,260,000	8,221,500		8,771,868
Temporary differences related to depreciation, amortization, and impairment of equipment and intangible assets	2,359,624	15,396,549		24,890,416
Startup expenses and advertising fees	32,625	212,880		199,704
Temporary differences related to research and development credits	162,000	1,057,050		1,120,850
Temporary differences related to equity investments	1,799,243	11,740,058		5,069,035
Foreign tax credits	0	0		0
Temporary differences related to provision for prepayment for equipment	766,284	5,000,000		5,000,000
Tax loss carry forwards	39,380,603	256,958,435		270,594,922
Total deferred tax assets	46,411,355	302,834,095		321,240,842
Less: Valuation allowance	(46,411,355)	(302,834,095)	$ (49,232,313)	(321,240,842)	¥ (342,164,400)
Total deferred tax assets	$ 0	¥ 0		¥ 0

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TAXATION - Valuation allowance (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
TAXATION
Beginning Balance	$ 49,232,313	¥ 321,240,842	¥ 342,164,400
Decrease in valuation allowance	(2,820,958)	(18,406,747)	(20,923,558)
Ending Balance	$ 46,411,355	¥ 302,834,095	¥ 321,240,842

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TAXATION - Additional Information (Details)	1 Months Ended		12 Months Ended
	Dec. 22, 2017	Oct. 31, 2017	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)
Income Taxes [Line Items]
Statutory tax rate	34.00%		25.00%	25.00%	25.00%	25.00%	25.00%	25.00%
Preferential enterprise income tax rate for three years					15.00%	15.00%
Increase (decrease) in valuation allowance			$ 2,820,958	¥ 18,406,747		¥ 20,923,558
Effective Income Tax Rate Reconciliation, Equity in Earnings (Losses) of Unconsolidated Subsidiary, Amount			0		$ 0
Net operating loss carry forwards | ¥									¥ 327,800,000
Deferred taxation			$ (2,820,958)	¥ (18,406,747)		¥ (20,923,558)		¥ (59,579,318)
Withholding income tax rate for dividends from profits of foreign invested enterprises			10.00%	10.00%
Income tax, statute of limitation, underpayment of tax liability to be considered as special circumstance | ¥									¥ 100,000
Income tax, statute of limitation under special circumstance			10 years	10 years
Scenario, Plan [Member]
Income Taxes [Line Items]
Statutory tax rate	21.00%
Minimum
Income Taxes [Line Items]
Period for Carry Forward of Qualified HNTE Losses					5 years	5 years
Withholding income tax rate for dividends from profits of foreign invested enterprises			5.00%	5.00%
Percentage of beneficial interest owned			25.00%	25.00%
Income tax, statute of limitation			3 years	3 years
Maximum
Income Taxes [Line Items]
Period for Carry Forward of Qualified HNTE Losses					10 years	10 years
Withholding income tax rate for dividends from profits of foreign invested enterprises			10.00%	10.00%
Percentage of beneficial interest owned			25.00%	25.00%
Income tax, statute of limitation			5 years	5 years
Shanghai The9 Information Technology Co., Ltd. ("Shanghai IT")
Income Taxes [Line Items]
Preferential enterprise income tax rate for three years		15.00%
CAYMAN ISLANDS
Income Taxes [Line Items]
Accrued Withholding Income Tax Amount			$ 0
Hong Kong
Income Taxes [Line Items]
Accrued Withholding Income Tax Amount			0		$ 0		$ 0
Singapore
Income Taxes [Line Items]
Accrued Withholding Income Tax Amount			0		$ 0		0
United states
Income Taxes [Line Items]
Statutory tax rate					21.00%	21.00%
State income tax rate					0.28%	0.28%
Federal tax
Income Taxes [Line Items]
Net operating loss carry forwards			$ 127,200,000
Net operating loss carry forwards, expiration year			2029	2029
Tax credit available to offset future taxes payable							100,000
State income tax
Income Taxes [Line Items]
Net operating loss carry forwards			$ 68,400,000
Net operating loss carry forwards, expiration year			2019	2019
Tax credit available to offset future taxes payable							100,000
Foreign tax authority
Income Taxes [Line Items]
Deferred taxation			$ (6,791,159)	¥ (44,312,311)		¥ (15,151,553)		¥ (19,816,235)
Foreign tax credit available to offset future taxes payable							$ 2,500,000
Tax credit available to offset future taxes payable, expiration date							2020	2020

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SHORT-TERM BORROWINGS (Details)	Dec. 31, 2019 CNY (¥)
SHORT-TERM BORROWINGS
Short-term borrowings	¥ 117,526,089
Long-term borrowings due within one year	31,624,560
Less: borrowing classified as held for sale	(31,624,560)
Pledged Loan
SHORT-TERM BORROWINGS
Short-term borrowings	82,645,089
Interest-free loan
SHORT-TERM BORROWINGS
Short-term borrowings	¥ 34,881,000

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SHORT-TERM BORROWINGS - Additional Information (Details) $ in Millions					1 Months Ended			12 Months Ended
	Sep. 18, 2020 USD ($)	Sep. 18, 2020 CNY (¥)	Sep. 09, 2020 USD ($)	Sep. 09, 2020 CNY (¥)	Apr. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2016 HKD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2015 USD ($)	Dec. 31, 2015 CNY (¥)
SHORT-TERM BORROWINGS
Initial deposit for joint venture arrangement					$ 5,000,000					¥ 34,881,000	¥ 0
Repayment of the principal and interest by cash								$ 48,878,103	¥ 318,929,623	¥ 0	¥ 0
Asian Development | Disposal Group, Disposed of by Means Other than Sale
SHORT-TERM BORROWINGS
Gain on disposal of subsidiary	$ 12,800,000	¥ 83,700,000	$ 12,000,000	¥ 83,700,000
Joint venture to manufacture, market, distribute and sell electric cars
SHORT-TERM BORROWINGS
Initial deposit for joint venture arrangement						$ 5,000,000
Maximum | Joint venture to manufacture, market, distribute and sell electric cars
SHORT-TERM BORROWINGS
Committed capital investment in joint venture						$ 600,000,000
L&A International Holding Limited
SHORT-TERM BORROWINGS
Line of credit annual interest rate							2.00%
Line of credit amount							$ 92.3
Line of credit , duration							24 months
Amount of shares pledged | shares							417,440,000
Entrusted Bank Borrowing Agreement
SHORT-TERM BORROWINGS
Bank borrowing amount												$ 4,800,000	¥ 31,600,000

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Funds raised for CrossFire New Mobile Game	$ 8,630,080	¥ 56,311,274	¥ 57,499,910
Professional services	1,512,074	9,866,284	11,844,738
Agency commission fees payable	980,398	6,397,096
Staff cost related payables	588,943	3,842,856	9,851,024
Office expenses	294,365	1,920,735	3,543,495
Product development services	129,998	848,237	906,906
Other payables			3,540,000
Utility fees			1,646,394
Others	671,937	4,384,391	4,308,376
Total	$ 12,807,795	¥ 83,570,873	¥ 93,140,843

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Additional Information (Details)	1 Months Ended
	Sep. 30, 2020 USD ($)	Apr. 30, 2020 USD ($)	Apr. 30, 2020 CNY (¥)	Oct. 31, 2016 USD ($)	Oct. 31, 2016 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Oct. 31, 2016 CNY (¥)
Accounts Payable and Accrued Liabilities
Funds raised for the development of CrossFire new mobile game						$ 8,630,080	¥ 56,311,274	¥ 57,499,910
Refund claimed through civil suit	$ 13,000,000
Inner Mongolia Culture Assets and Equity Exchange | CrossFire New Mobile Game
Accounts Payable and Accrued Liabilities
Funds raised for the development of CrossFire new mobile game				$ 8,800,000		8,800,000	57,500,000		¥ 57,500,000
Additional funds aimed to be raised for the development of CrossFire new mobile game				15,300,000		$ 15,300,000	¥ 100,000,000		¥ 100,000,000
Principal amount of refund claimed through civil suit		$ 8,800,000	¥ 57,500,000	8,800,000	¥ 57,500,000
Interest amount of refund claimed through civil suit		$ 700,000	¥ 4,600,000	$ 700,000	¥ 4,600,000

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Refund of WoW Game Points (Details)	12 Months Ended
	Dec. 31, 2011 USD ($)	Dec. 31, 2011 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2009 USD ($)	Dec. 31, 2009 CNY (¥)
Acquired Finite-Lived Intangible Assets
Liability related to refund of WOW game points			$ 26,053,438	¥ 169,998,682		¥ 169,998,682
Other operating income	$ 4,000,000	¥ 26,000,000
Legal liability	2 years	2 years
Liability related to refund of WOW game points, release period	20 years	20 years
World of Warcraft ("WoW")
Acquired Finite-Lived Intangible Assets
Liability related to refund of WOW game points			$ 26,100,000	¥ 170,000,000	$ 26,100,000	¥ 170,000,000	$ 30,700,000	¥ 200,400,000

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CONVERTIBLE NOTES (Details)						1 Months Ended		12 Months Ended
	Jun. 12, 2020 shares	May 29, 2020 USD ($)	Sep. 26, 2019 USD ($) subsidiary	Nov. 24, 2015 USD ($)	Nov. 24, 2015 USD ($)	Oct. 31, 2020 USD ($)	Sep. 30, 2019 subsidiary	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Feb. 03, 2020 USD ($)	Sep. 26, 2019 CNY (¥)	Dec. 11, 2015 USD ($)
Debt Instrument [Line Items]
Number of subsidiaries disposed off | subsidiary							3
Gain on extinguishment of convertible notes								$ 8,698,223	¥ 56,800,000	¥ 0	¥ 0
Interest-free loan extended by Ark Pacific Associates Limited
Debt Instrument [Line Items]
Principal amount		$ 5,000,000
Convertible notes issued to Iliad
Debt Instrument [Line Items]
Principal amount												$ 500,000
Interest rate (as a percent)												6.00%
Gain on extinguishment of convertible notes						$ 0
The9 Computer, C9I Shanghai and Shanghai Kaie
Debt Instrument [Line Items]
Number of subsidiaries disposed off | subsidiary			3
The9 Computer, C9I Shanghai and Shanghai Kaie | Held for sale
Debt Instrument [Line Items]
Total consideration			$ 75,600,000										¥ 493,000,000
12% Convertible Senior Notes Due 2018
Debt Instrument [Line Items]
Principal amount				$ 40,050,000	$ 40,050,000
Notes due date				2018
Notes extension					2 years
Interest rate (as a percent)				12.00%	12.00%
Interest rate after reduction applied retrospectively (as a percent)		7.00%
Repayment of convertible notes		$ 50,000,000
Repayment of debt in shares | shares	32,400,000
Beneficial conversion feature														$ 8,100,000

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WARRANTS (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2009
SHAREHOLDER RIGHTS PLAN
Exercise Price		$ 19.50
Tranche I
SHAREHOLDER RIGHTS PLAN
Principal Amount	5,000,000
Exercise Price	$ 1.50
Tranche A
SHAREHOLDER RIGHTS PLAN
Principal Amount	2,750,000
Exercise Price	$ 2.60
Tranche B
SHAREHOLDER RIGHTS PLAN
Principal Amount	1,650,000
Exercise Price	$ 5.20
Tranche C
SHAREHOLDER RIGHTS PLAN
Principal Amount	550,000
Exercise Price	$ 7.80

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WARRANTS - Additional Information (Details)	1 Months Ended	12 Months Ended
	Oct. 31, 2020 shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2016 shares
SHAREHOLDER RIGHTS PLAN
Fair value of warrants | ¥						¥ 0		¥ 200,000
Fair value change on warrants liability		$ (5,801)	¥ (37,851)	¥ (1,292,244)	¥ (2,251,427)
Equity linked warrants
SHAREHOLDER RIGHTS PLAN
Expiration term of warrants	3 years
Representative warrants
SHAREHOLDER RIGHTS PLAN
Fair value of warrants		300,000				¥ 1,700,000	$ 300,000	¥ 1,900,000
Fair value change on warrants liability		$ 20,000	¥ 200,000
Expiration term of warrants	3 years
Period from effective date of the registration statement, that the warrants become exercisable	6 months
Maximum
SHAREHOLDER RIGHTS PLAN
Number of shares called by warrants									4,778,846
Maximum | Equity linked warrants | ADS
SHAREHOLDER RIGHTS PLAN
Number of shares called by warrants	2,702,500

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SHAREHOLDER RIGHTS PLAN (Details) - $ / shares	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2009
SHAREHOLDER RIGHTS PLAN
Exercise price of shareholders rights plan			$ 19.50
Minimum
SHAREHOLDER RIGHTS PLAN
Shareholders rights plan, ownership interest for rights to be exercisable			15.00%
Class A Ordinary Shares
SHAREHOLDER RIGHTS PLAN
Ordinary shares, shares issued	247,090,351	103,737,691
Ordinary shares, shares outstanding	247,090,351	103,737,691
Class B ordinary shares
SHAREHOLDER RIGHTS PLAN
Ordinary shares, shares issued	12,942,011	9,192,011
Ordinary shares, shares outstanding	12,942,011	9,192,011

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EMPLOYEE BENEFITS (Details) ¥ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
EMPLOYEE BENEFITS
Employee benefits expenses related to full-time employees of subsidiaries and VIE subsidiaries incorporated in PRC	$ 0.2	¥ 1.2	¥ 4.5	¥ 7.9

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SHARE-BASED COMPENSATION - Share option activities (Details)			12 Months Ended
	Sep. 04, 2018 shares	Jan. 24, 2018 shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2019 CNY (¥) shares	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2020 CNY (¥) shares
Stock Options
Number of Options
Outstanding at beginning of year | shares			50,000	50,000
Granted | shares		5,750,000	0	0
Exercised | shares			0	0
Forfeited | shares	(4,700,000)		0	0
Outstanding at end of year | shares			50,000	50,000	50,000	50,000
Vested and expected at end of year | shares			50,000						50,000
Exercisable at end of year | shares			50,000						50,000
Weighted-Average Exercise Price
Outstanding at beginning of year | $ / shares			$ 0.93
Granted | $ / shares			0.00
Exercised | $ / shares			0.00
Forfeited | $ / shares			0.00
Outstanding at end of year | $ / shares			0.93		$ 0.93
Vested and expected at end of year | $ / shares			0.93
Exercisable at end of year | $ / shares			$ 0.93
Weighted-Average Remaining Contractual Term (years)
Outstanding at beginning of year			2 years 26 days	2 years 26 days	3 years 26 days	3 years 26 days
Vested and expected to vest at end of year			2 years 26 days	2 years 26 days
Exercisable at end of year			2 years 26 days	2 years 26 days
Aggregate Intrinsic Value
Outstanding at beginning of year | ¥				¥ 0
Granted | ¥ / shares				¥ 0.00
Exercised			$ 0	¥ 0	$ 0		$ 0
Forfeited | ¥				0
Outstanding at end of year | ¥				¥ 0		¥ 0
Vested and expected to vest at end of period | ¥									¥ 0
Exercisable at end of period | ¥									¥ 0
Performance conditions
Number of Options
Outstanding at beginning of year | shares			1,000,000	1,000,000
Granted | shares			0	0
Exercised | shares			0	0
Forfeited | shares			(1,000,000)	(1,000,000)
Outstanding at end of year | shares			0	0	1,000,000	1,000,000
Vested and expected at end of year | shares			0						0
Exercisable at end of year | shares			0						0
Weighted-Average Exercise Price
Outstanding at beginning of year | $ / shares			$ 0.93
Granted | $ / shares			0.00
Exercised | $ / shares			0.00
Forfeited | $ / shares			0.93
Outstanding at end of year | $ / shares			0.00		$ 0.93
Vested and expected at end of year | $ / shares			0.00
Exercisable at end of year | $ / shares			$ 0.00
Weighted-Average Remaining Contractual Term (years)
Outstanding at beginning of year			0 years	0 years	3 years 26 days	3 years 26 days
Vested and expected to vest at end of year			0 years	0 years
Exercisable at end of year			0 years	0 years
Aggregate Intrinsic Value
Outstanding at beginning of year | ¥				¥ 0
Granted | ¥ / shares				¥ 0.00
Exercised | ¥				¥ 0
Forfeited | ¥				0
Outstanding at end of year | ¥				¥ 0		¥ 0
Vested and expected to vest at end of period | ¥									¥ 0
Exercisable at end of period | ¥									¥ 0
Stock options and ordinary shares granted by Red 5
Number of Options
Outstanding at beginning of year | shares			5,111,250	5,111,250
Granted | shares			0	0
Exercised | shares			0	0
Forfeited | shares			0	0
Outstanding at end of year | shares			5,111,250	5,111,250	5,111,250	5,111,250
Vested and expected at end of year | shares			5,111,250						5,111,250
Exercisable at end of year | shares			5,111,250						5,111,250
Weighted-Average Exercise Price
Outstanding at beginning of year | $ / shares			$ 0.049
Granted | $ / shares			0.000
Exercised | $ / shares			0.000
Forfeited | $ / shares			0.000
Outstanding at end of year | $ / shares			0.049		$ 0.049
Vested and expected at end of year | $ / shares			0.049
Exercisable at end of year | $ / shares			$ 0.049
Weighted-Average Remaining Contractual Term (years)
Outstanding at beginning of year			2 months 27 days	2 months 27 days	1 year 2 months 27 days	1 year 2 months 27 days
Vested and expected to vest at end of year			2 months 27 days	2 months 27 days
Exercisable at end of year			2 months 27 days	2 months 27 days
Aggregate Intrinsic Value
Outstanding at beginning of year | $			$ 0
Granted | ¥ / shares				¥ 0
Exercised | $			0		$ 0		$ 0	$ 0
Forfeited | $			0
Outstanding at end of year | $			0		$ 0
Vested and expected to vest at end of period | $			0
Exercisable at end of period | $			$ 0

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SHARE-BASED COMPENSATION - Black-Scholes option pricing model (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.19%
Expected life (years)	2 years 11 months 5 days
Volatility	78.55%
Fair value of options at grant date	$ 0.51
Performance conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.19%
Expected life (years)	2 years 11 months 5 days
Volatility	78.55%
Fair value of options at grant date	$ 0.51
Stock options and ordinary shares granted by Red 5
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.78%
Expected life (years)	4 years
Expected dividend yield	0.00%
Volatility	45.70%

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SHARE-BASED COMPENSATION - (Details)						1 Months Ended	12 Months Ended
	Jun. 17, 2020 shares	Jan. 21, 2019 shares	Sep. 04, 2018 shares	Jan. 24, 2018 shares	Jun. 06, 2017 shares	Feb. 28, 2021 shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2019 CNY (¥) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2018 CNY (¥) shares	Dec. 31, 2017 USD ($)	Dec. 31, 2020 CNY (¥) shares	Aug. 31, 2016 shares	Nov. 30, 2015 shares	Dec. 31, 2013 shares	Sep. 30, 2011 shares	Dec. 31, 2010 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity granted		15,000,000	30,000,000
Number of awards granted						32,190,000
Share-based Compensation							$ 8,437,766	¥ 55,056,426		¥ 21,750,533		¥ 3,898,328
Directors, officers and consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options canceled		15,000,000	6,200,000
2004 Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options canceled					10,806,665
Maximum aggregate number of ordinary shares approved for issuance											100,000,000	100,000,000			34,449,614	14,449,614	6,449,614
Stock options contractual term							5 years	5 years
Options to purchase ordinary share, outstanding shares							50,000							50,000
Options to purchase ordinary shares, available for future grants							33,352,118							33,352,118
Number of options exercised					6,328,535
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options canceled			4,700,000				0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				5,750,000			0	0
Total instrinsic value of options exercised							$ 0	¥ 0	$ 0		$ 0
Options to purchase ordinary share, outstanding shares							50,000		50,000	50,000				50,000
Number of options exercised							0	0
Fair value of options granted | $ / shares							$ 0.51
Share options granted				5,750,000			0	0
Shares vested period				36 months
Share options forfeited			1,000,000
Stock options and ordinary shares granted by Red 5
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options canceled							0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							0	0
Maximum aggregate number of ordinary shares approved for issuance																		22,855,591	13,626,955
Total instrinsic value of options exercised | $							$ 0		$ 0		$ 0		$ 0
Options to purchase ordinary share, outstanding shares							5,111,250		5,111,250	5,111,250				5,111,250
Options to purchase ordinary shares, available for future grants							15,480,087							15,480,087
Share-based Compensation | ¥								¥ 0		¥ 50,000		¥ 40,000
Number of options exercised							0	0
Share options granted							0	0
Unrecognized compensation cost | ¥														¥ 0
Stock award term							10 years	10 years
Option granted							38,191,879	38,191,879
Maximum exercisable period for stock options granted to a person who is a greater than 10% shareholder on date of grant							5 years	5 years
Stock options and ordinary shares granted by Red 5 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, exercise price | $ / shares							$ 0.2450
Stock options and ordinary shares granted by Red 5 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of options granted | $ / shares							0.0178
Stock options, exercise price | $ / shares							$ 0.0001
Performance conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options canceled							1,000,000	1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							0	0
Total instrinsic value of options exercised | ¥								¥ 0
Options to purchase ordinary share, outstanding shares							0		1,000,000	1,000,000				0
Share-based Compensation							$ 8,400,000	¥ 55,100,000		¥ 21,300,000		¥ 3,900,000
Number of options exercised							0	0
Fair value of options granted | $ / shares							$ 0.51
Share options granted							0	0
Unrecognized compensation cost							$ 700,000							¥ 4,400,000
Restricted shares | Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards granted	29,100,000
Performance based Restricted Shares | Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards granted	15,600,000
Time based Restricted Shares | Class A Ordinary Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of awards granted	13,500,000
Lock in period	6 months

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RELATED PARTY TRANSACTIONS AND BALANCES (Details)	1 Months Ended			12 Months Ended				24 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 CNY (¥)	Jun. 30, 2019 shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2020 CNY (¥)
RELATED PARTY TRANSACTIONS AND BALANCES
Repayments of related party debt				$ 6,520,327	¥ 42,545,136	¥ 10,023,576	¥ 29,127,540
Zhenjiang Kexin Power System Design and Research Co., Ltd. ("Zhenjiang Kexin")
RELATED PARTY TRANSACTIONS AND BALANCES
Common Stock, Shares Subscribed but Unissued | shares			3,444,882
Percentage of equity interest			9.90%	9.90%	9.90%
Chief Executive Officer
RELATED PARTY TRANSACTIONS AND BALANCES
Loan from related party						16,100,000			¥ 0
Repayments of related party debt				$ 6,500,000	¥ 42,500,000	0
Amount due to related party				3,200,000		63,200,000			20,600,000
Big Data
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related party					0	20,000
Amount due from related party				$ 20,000		100,000			100,000
ZTE9 network technology Co., Ltd., Wuxi ("ZTE9")
RELATED PARTY TRANSACTIONS AND BALANCES
Revenue from related party								¥ 0
Repayments of related party debt	$ 200,000	¥ 1,000,000
Funds to related party					¥ 0	0
Amount due from related party						1,000,000			0
Amount due to related party						¥ 200,000			¥ 0

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(LOSS) INCOME PER SHARE (Details)	12 Months Ended
	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares	Dec. 31, 2019 CNY (¥) ¥ / shares shares	Dec. 31, 2018 CNY (¥) ¥ / shares shares
Numerator:
Net loss attributable to ordinary shareholders before change in redeemable noncontrolling interest	$ 60,978,298	¥ 397,883,388	¥ (177,795,168)	¥ (217,092,926)
Change in redeemable noncontrolling interest	(182,394)	(1,190,122)	(12,827,598)	(40,918,773)
Net loss attributable to ordinary shareholders	$ 60,795,904	¥ 396,693,266	¥ (190,622,766)	¥ (258,011,699)
Denominator:
Denominator for basic and diluted loss per share - weighted-average shares outstanding	163,599,920	163,599,920	106,407,008	62,114,760
Net (loss) income attributable to holders of ordinary shares per share - Basic and diluted | (per share)	$ 0.37	¥ 2.42	¥ (1.79)	¥ (4.15)

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(LOSS) INCOME PER SHARE - Additional Information (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
(LOSS) INCOME PER SHARE
Anti-dilutive securities excluded from computation of diluted loss per share	4,200,645	13,213,978	20,383,333

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RESTRICTED NET ASSETS (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)
Restricted Cash and Cash Equivalents Items
Appropriation of statutory reserves	¥ 0	¥ 0	¥ 0
Accumulated reserves				$ 0.6	¥ 3,800,000
Restricted registered capital				1.8	11,500,000
Amount of restricted net assets				$ 1.2	¥ 7,700,000
Minimum
Restricted Cash and Cash Equivalents Items
Percentage of appropriation of statutory reserve from retained earnings after tax profits	10.00%
Maximum
Restricted Cash and Cash Equivalents Items
Percentage of appropriations of statutory reserve of registered capital	50.00%

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NONCONTROLLING INTEREST (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
NONCONTROLLING INTEREST
Net (loss) income attributable to The9 Limited	$ 60,978,299	¥ 397,883,388	¥ (177,795,168)	¥ (217,092,926)
Transfers (to) from the noncontrolling interest
Change in The9 Limited's additional paid-in capital for adjustment on noncontrolling interest as a result of issuance of common shares of Red 5 upon vesting of stock options and restricted shares (1)	0	0	0	0
Change from net (loss) income attributable to The9 Limited and transfers to noncontrolling interests	$ 60,978,299	¥ 397,883,388	¥ (177,795,168)	¥ (217,092,926)

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NONCONTROLLING INTEREST- Additional Information (Details) - shares	1 Months Ended
	Jun. 30, 2016	Jun. 30, 2020	Dec. 31, 2016	May 31, 2016
L&A International Holding Limited
Noncontrolling Interest
Equity interest owned by company	58.10%	35.00%	37.00%	10.40%
Ordinary shares of L&A	723,313,020
Stock split ratio	one-to-five stock split
Percentage of shares received related to payment of service fee to third party consultant	6.00%
Ordinary shares of L&A, gross	769,481,940
Red 5 Studios, Inc. ("Red 5") | MOU
Noncontrolling Interest
Equity interest owned by company	30.60%

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REDEEMABLE NONCONTROLLING INTEREST - Holders of SPBS (Details) - Series B Redeemable Convertible Preferred Shares - shares	Dec. 31, 2020	Dec. 31, 2019
Shanghai Oriental Pearl Culture Development Co Ltd
Redeemable Noncontrolling Interest
Number of shares	17,258,399	17,258,399
L&A International Holding Limited
Redeemable Noncontrolling Interest
Number of shares	10,180,553	10,180,553

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REDEEMABLE NONCONTROLLING INTEREST - Reconciliation (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
NONCONTROLLING INTEREST
Redeemable noncontrolling interest opening balance	$ 53,493,724	¥ 349,046,548	¥ 341,074,539
Net loss attributable to redeemable noncontrolling interest	(182,394)	(1,190,122)	(4,855,589)	¥ (5,858,902)
Change in redeemable noncontrolling interest	182,394	1,190,122	12,827,598
Redeemable noncontrolling interest ending balance	$ 53,493,724	¥ 349,046,548	¥ 349,046,548	¥ 341,074,539

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REDEEMABLE NONCONTROLLING INTEREST - Additional Information (Details) - CNY (¥)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Redeemable Noncontrolling Interest
Common shares purchased by Oriental Pearl, value	¥ 36,072,921	¥ 9,300,578
Ordinary shares
Redeemable Noncontrolling Interest
Common stock issued	15,444,882	46,771,429
Common shares purchased by Oriental Pearl, value	¥ 1,041,557	¥ 3,173,806

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DISPOSAL OF A SUBSIDIARY (Details) $ in Millions								1 Months Ended
	Sep. 18, 2020 USD ($)	Sep. 18, 2020 CNY (¥)	Sep. 09, 2020 USD ($)	Sep. 09, 2020 CNY (¥)	Feb. 21, 2020 USD ($)	Feb. 21, 2020 CNY (¥)	Sep. 26, 2019 USD ($) subsidiary	Sep. 30, 2019 subsidiary	Sep. 26, 2019 CNY (¥)
DISPOSAL OF A SUBSIDIARY
Number of subsidiaries disposed of								3
The9 Computer, C9I Shanghai and Shanghai Kaie
DISPOSAL OF A SUBSIDIARY
Number of subsidiaries disposed of							3
The9 Computer, C9I Shanghai and Shanghai Kaie | Disposal Group, Disposed of by Sale
DISPOSAL OF A SUBSIDIARY
Number of subsidiaries disposed of							3
Total consideration							$ 75.6		¥ 493,000,000
Gain on disposal of subsidiary					$ 60.1	¥ 391,800,000
Asian Development | Disposal Group, Disposed of by Means Other than Sale
DISPOSAL OF A SUBSIDIARY
Gain on disposal of subsidiary	$ 12.8	¥ 83,700,000	$ 12.0	¥ 83,700,000

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COMMITMENTS AND CONTINGENCIES (Details) $ / shares in Units, $ in Millions				1 Months Ended											12 Months Ended
	Jun. 06, 2017 $ / shares shares	Oct. 09, 2016 USD ($)	Oct. 09, 2016 CNY (¥)	Nov. 30, 2020 USD ($) shares	Sep. 30, 2020 USD ($)	Apr. 30, 2020 USD ($)	Apr. 30, 2020 CNY (¥)	Apr. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) shares	Jan. 31, 2019 USD ($)	Oct. 31, 2016 USD ($)	Oct. 31, 2016 CNY (¥)	Jun. 30, 2016 HKD ($) shares	Aug. 31, 2014 shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2020 CNY (¥)	Jul. 31, 2020 USD ($)	Jun. 30, 2020	Dec. 31, 2019 CNY (¥)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 CNY (¥)	Dec. 31, 2016	Oct. 31, 2016 CNY (¥)	Jun. 30, 2016 USD ($)	May 31, 2016	Nov. 24, 2015 USD ($)
Loss Contingencies
Funds raised for the development of CrossFire new mobile game															$ 8,630,080					¥ 56,311,274			¥ 57,499,910
Funds required for the development of CrossFire new mobile game																					$ 800,000
Investments in equity investees | ¥																							10,000,000
Initial deposit paid for investments								$ 5,000,000										¥ 34,881,000	¥ 0
Number of installments to pay capital contribution					3,000,000
Total aggregated claim					$ 13,000,000
Redeemable convertible preferred shares redemption value															182,394	¥ 1,190,122		12,827,598
Maximum assets worldwide not to be disposed off															55,500,000
Minimum Guarantee Payment					13,000,000
Upfront Payment					$ 3,000,000
12% Convertible Senior Notes Due 2018
Loss Contingencies
Interest rate (as a percent)																														12.00%
Principal amount																														$ 40,050,000
Copyright infringements
Loss Contingencies
Total aggregated claim															500,000	3,000,000
2004 Option Plan
Loss Contingencies
Number of options canceled | shares	10,806,665
Common stock par value | $ / shares	$ 0.01
Beijing Ti Knight
Loss Contingencies
Purchase commitment amount															900,000	6,000,000
Joint venture to manufacture, market, distribute and sell electric cars
Loss Contingencies
Initial deposit paid for investments									$ 5,000,000
Joint venture to manufacture, market, distribute and sell electric cars | Maximum
Loss Contingencies
Investment commitments									600,000,000
Equity Method Investment Funding Commitment									600,000,000
System Link Corporation Limited ('System Link")
Loss Contingencies
Refund of court acceptance fee paid																	$ 600,000	¥ 3,800,000
First Installment | Series B Redeemable Convertible Preferred Shares
Loss Contingencies
Redeemable convertible preferred shares redemption value															16,500,000
Second Installment | Series B Redeemable Convertible Preferred Shares
Loss Contingencies
Redeemable convertible preferred shares redemption value															18,100,000
Third Installment | Series B Redeemable Convertible Preferred Shares
Loss Contingencies
Redeemable convertible preferred shares redemption value															19,900,000
FF Intelligent Mobility Global Holdings Ltd. ("FF Intelligent")
Loss Contingencies
Initial deposit paid for investments				$ 5,000,000					$ 5,000,000
Number Of Shares In To Which Initial Deposit On Investments Were Converted | shares				2,994,011					2,994,011
Shanghai The9 Information Technology Co., Ltd. ("Shanghai IT") | Beijing Ti Knight
Loss Contingencies
Investment commitments															600,000					4,100,000				$ 1,400,000	¥ 9,000,000
Investments in equity investees																	800,000						4,900,000
Purchase commitment amount		$ 600,000	¥ 4,100,000												1,000,000	6,800,000
Maximum accumulated investment for waiving purchase commitment															900,000	¥ 6,000,000
Equity Method Investment Funding Commitment															$ 600,000					¥ 4,100,000				$ 1,400,000	¥ 9,000,000
L&A International Holding Limited
Loss Contingencies
Line of credit amount													$ 92.3															$ 11,900,000
Interest rate (as a percent)													2.00%															2.00%
Line of credit , duration													24 months
Amount of shares pledged | shares													417,440,000
Percentage of shares owned													58.10%									35.00%				37.00%		58.10%	10.40%
Red 5 Studios, Inc. ("Red 5") | Series B Redeemable Convertible Preferred Shares
Loss Contingencies
Redeemable convertible preferred shares issued, shares | shares														27,438,952
New Star International Development Ltd ("New Star") | Series A Preferred Stock
Loss Contingencies
Redeemable convertible preferred shares issued, shares | shares															39,766,589	39,766,589
Jiu Gang | Smilegate
Loss Contingencies
Share ownership for investments accounted for under equity method (as a percent)															20.00%					20.00%
Jiu Gang | Shenzhen EN-plus Technologies Co., Ltd. ("EN+")
Loss Contingencies
Share ownership for investments accounted for under equity method (as a percent)															80.00%					80.00%
Jiu Gang | Joint venture related to new energy electric vehicles
Loss Contingencies
Investment commitments																	7,700,000						50,000,000
Equity Method Investment Funding Commitment																	$ 7,700,000						¥ 50,000,000
CrossFire New Mobile Game | Smilegate
Loss Contingencies
Period for payment of minimum guarantee for royalty										30 days
CrossFire New Mobile Game | Minimum | Smilegate
Loss Contingencies
Guarantee for royalty										$ 2,000,000
CrossFire New Mobile Game | Inner Mongolia Culture Assets and Equity Exchange
Loss Contingencies
Funds raised for the development of CrossFire new mobile game											$ 8,800,000				$ 8,800,000					¥ 57,500,000							¥ 57,500,000
Additional funds aimed to be raised for the development of CrossFire new mobile game											15,300,000				15,300,000					100,000,000							¥ 100,000,000
Funds required for the development of CrossFire new mobile game															$ 24,100,000					¥ 157,500,000
Principal amount of refund claimed through civil suit						$ 8,800,000	¥ 57,500,000				8,800,000	¥ 57,500,000
Interest amount of refund claimed through civil suit						$ 700,000	¥ 4,600,000				$ 700,000	¥ 4,600,000

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SEGMENT REPORTING (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Revenues from External Customers and Long-Lived Assets
Net revenues	$ 95,860	¥ 625,488	¥ 341,495	¥ 17,431,858
Greater China
Revenues from External Customers and Long-Lived Assets
Net revenues	95,860	625,488	182,107	16,430,205
Other areas
Revenues from External Customers and Long-Lived Assets
Net revenues	$ 0	¥ 0	¥ 159,388	¥ 1,001,653

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SEGMENT REPORTING - Additional Information (Details)	12 Months Ended
	Dec. 31, 2020 segment
SEGMENT REPORTING
Number of operating segment	1

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SUBSEQUENT EVENTS (Details)				1 Months Ended					12 Months Ended
	Jun. 17, 2020 shares	May 29, 2020 USD ($)	Sep. 26, 2019 USD ($) subsidiary	Mar. 31, 2021 USD ($) item $ / shares shares	Feb. 28, 2021 USD ($) item $ / shares shares	Jan. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2019 subsidiary	Dec. 31, 2020 USD ($) $ / shares	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Mar. 22, 2021 USD ($)	Dec. 31, 2019 $ / shares	Dec. 31, 2019 CNY (¥)	Sep. 26, 2019 CNY (¥)	Nov. 24, 2015 USD ($)
Number of subsidiaries disposed of | subsidiary								3
Convertible notes (including convertible notes of consolidated VIEs without recourse to the Group of nil as of both December 31, 2019 and 2020) | ¥															¥ 414,127,908
Refund claimed through civil suit							$ 13,000,000
Number of awards granted | shares					32,190,000
Cash consideration for purchase of Filecoin mining machine					$ 10,000,000
Proceeds from the issuance of convertible note									$ 514,693	¥ 3,358,369	¥ 0	¥ 0
Class A Ordinary Shares
Common Stock, Par or Stated Value Per Share | $ / shares									$ 0.01					$ 0.01
Restricted shares | Class A Ordinary Shares
Number of awards granted | shares	29,100,000
12% Convertible Senior Notes Due 2018
Repayment of convertible notes		$ 50,000,000
Principal amount																	$ 40,050,000
Interest rate (as a percent)																	12.00%
Debt Instrument, Face Amount																	$ 40,050,000
Debt Instrument, Interest Rate, Stated Percentage																	12.00%
The9 Computer, C9I Shanghai and Shanghai Kaie
Number of subsidiaries disposed of | subsidiary			3
The9 Computer, C9I Shanghai and Shanghai Kaie | Held for sale
Total consideration			$ 75,600,000													¥ 493,000,000
Subsequent Event
Market capitalization to be reached in 6 months						$ 100,000,000
Market capitalization to be reached in 12 months						300,000,000
Market capitalization to be reached in 24 months						500,000,000
Market capitalization to be reached in 36 months						$ 1,000,000,000
Subsequent Event | Convertible notes issued to Streeterville, one
Period for exercising the right to convert					6 months
Debt Instrument, Term					1 year
Number of days in a year considered for interest rate determination					360
Debt Conversion, Period To Exercise Conversion Right					6 months
Threshold amount for redemption per calendar month					$ 840,000
Redemption premium percentage					10.00%
Prepayment premium percentage					15.00%
Subsequent Event | Convertible notes issued to Streeterville, two
Principal amount				$ 20,000,000
Interest rate (as a percent)				6.00%
Period for exercising the right to convert				6 months
Debt Instrument, Term				1 year
Debt Instrument, Face Amount				$ 20,000,000
Proceeds from the issuance of convertible note				$ 20,000,000
Debt Instrument, Interest Rate, Stated Percentage				6.00%
Number of days in a year considered for interest rate determination | item				360
Debt Conversion, Period To Exercise Conversion Right				6 months
Initial conversion price as percent of trading prices				90.00%
Number of trading days considered for determination of initial conversion price | item				(5)
Period after the Start date that the lender has right to redeem the convertible note				6 months
Threshold amount for redemption per calendar month				$ 3,360,000
Redemption premium percentage				10.00%
Prepayment premium percentage				15.00%
Subsequent Event | Class A Ordinary Shares
Number of shares issued | shares						8,108,100
Aggregate price per share | $ / shares						$ 0.1233
Number of warrants issued | shares						207,891,840
Number of shares agreed to issue | shares					9,231,240
Consideration receivable on issuance of shares					$ 11,500,000
Shares Issued, Price Per Share | $ / shares						$ 0.1233
Shares Agreed To Issue | shares					9,231,240
Subsequent Event | Class A Ordinary Shares | Convertible notes issued to Streeterville, one
Ordinary shares | shares					10,000,000
Aggregate consideration					$ 5,000,000
Common Stock, Par or Stated Value Per Share | $ / shares					$ 0.0001
Share Price | $ / shares					$ 0.0001
Subsequent Event | ADS
Authorized shares to shell | shares					100,000,000
Period to sell authorized shares					36 months
Subsequent Event | ADS | Convertible notes issued to Streeterville, one
Ordinary shares | shares					50,000
Subsequent Event | Hangzhou SuanLiTechnology Co., Ltd
Equity interest acquired					70.00%
Acquisition consideration					$ 7,000,000
Subsequent Event | Hangzhou SuanLiTechnology Co., Ltd | ADS
Share price per ADS | $ / shares					$ 82.89
Subsequent Event | Restricted shares | Class A Ordinary Shares
Number of awards authorized | shares					33,090,000
Subsequent Event | Restricted shares subject to certain market capitalization conditions | Class A Ordinary Shares
Number of awards granted | shares					900,000
Market capitalization					$ 400,000,000
Subsequent Event | Restricted shares subject to certain market capitalization conditions | Vesting of next half of awards | Class A Ordinary Shares
Market capitalization					$ 500,000,000
Subsequent Event | Restricted shares units | Class A Ordinary Shares
Number of awards granted | shares					32,190,000
Subsequent Event | Cooperation agreement with Shenzhen MicroBT Electronics Technology Co., Ltd
Number of Bitcoin mining machines purchased | item					440
Number of Bitcoin mining machines that the company has right to offer to purchase | item					5,000
Period to exercise the right to offer purchase of Bitcoin mining machines					1 year
Number Of Bitcoin Mining Machines Purchased | item					440
Subsequent Event | Bitcoin mining machine purchase agreement, one
Number of bitcoin mining machine owners with whom the company has entered into purchase agreements | item					5
Total hash rate | $ / shares					$ 549
Percentage of global hash rate of Bitcoin					0.36%
Number Of Bitcoin Mining Machine Owners With Whom Purchase Agreements Were Entered | item					5
Total Hash Rate Of Bitcoin Mining Machines | $ / shares					$ 549
Subsequent Event | Bitcoin mining machine purchase agreement, one | Class A Ordinary Shares
Aggregate price per share | $ / shares					$ 0.37
Number of shares issued in exchange for Bitcoin mining machines | shares					26,838,360
Number of Bitcoin mining machines purchased					26,007
Number Of Bitcoin Mining Machines Purchased					26,007
Stock Issued During Period, Shares, Purchase of Assets | shares					26,838,360
Shares Issued, Price Per Share | $ / shares					$ 0.37
Subsequent Event | Bitcoin mining machine purchase agreement, one | ADS
Aggregate price per share | $ / shares					11.18
Shares Issued, Price Per Share | $ / shares					11.18
Subsequent Event | Bitcoin mining machine purchase agreement, two
Number of bitcoin mining machine owners with whom the company has entered into purchase agreements | item				5
Number of Bitcoin mining machines purchased | item				8,489
Total hash rate | $ / shares					251
Number Of Bitcoin Mining Machines Purchased | item				8,489
Number Of Bitcoin Mining Machine Owners With Whom Purchase Agreements Were Entered | item				5
Total Hash Rate Of Bitcoin Mining Machines | $ / shares					251
Subsequent Event | Bitcoin mining machine purchase agreement, two | Class A Ordinary Shares
Aggregate price per share | $ / shares				$ 0.78
Number of shares issued in exchange for Bitcoin mining machines | shares				3,832,830
Stock Issued During Period, Shares, Purchase of Assets | shares				3,832,830
Shares Issued, Price Per Share | $ / shares				$ 0.78
Subsequent Event | Bitcoin mining machine purchase agreement, two | ADS
Aggregate price per share | $ / shares				23.35
Shares Issued, Price Per Share | $ / shares				$ 23.35
Subsequent Event | Legally-binding memoranda of understanding
Number of legally-binding memoranda of understanding signed | item				3
Number of bitcoin mining machine owners with whom the company has entered into legally-binding memoranda of understanding | item				3
Period for determination of price adjustments on number of shares to be issued				6 months
Subsequent Event | Legally-binding memoranda of understanding | Class A Ordinary Shares
Number of shares agreed to issue | shares				5,883,750
Shares Agreed To Issue | shares				5,883,750
Share Price | $ / shares				$ 1.30
Subsequent Event | Legally-binding memoranda of understanding | ADS
Number of shares agreed to issue | shares				196,125
Shares Agreed To Issue | shares				196,125
Share Price | $ / shares				$ 38.51
Subsequent Event | Antminer S19j Bitcoin mining machines purchase agreement, one
Number of Bitcoin mining machines agreed to purchase | item				24,000
Total consideration payable in installments				$ 82,800,000
First installment payment													$ 16,600,000
Subsequent Event | Convertible notes issued to Iliad
Initial conversion price (in dollars per ADS) | $ / shares					$ 14.00
Subsequent Event | Convertible notes issued to Iliad | Convertible notes issued to Streeterville, one
Principal amount					$ 5,000,000
Initial conversion price (in dollars per ADS) | $ / shares					$ 14
Interest rate (as a percent)					6.00%
Debt Instrument, Face Amount					$ 5,000,000
Debt Instrument, Interest Rate, Stated Percentage					6.00%

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FINANCIAL INFORMATION OF PARENT COMPANY - CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Condensed Statement of Income Captions [Line Items]
Revenue	$ 95,860	¥ 625,488	¥ 343,077	¥ 17,492,415
Cost of revenue	(124,772)	(814,136)	(1,342,266)	(16,435,590)
Gross loss	(28,912)	(188,648)	(1,000,771)	996,268
Operating expenses:
Product development	(373,654)	(2,438,095)	(13,090,530)	(24,555,308)
Sales and marketing	(99,079)	(646,492)	(2,114,519)	(2,325,818)
General and administrative	(16,666,348)	(108,747,919)	(113,867,000)	(89,583,331)
Total operating expenses	(51,627,525)	(336,869,597)	162,746,124	105,991,298
Loss from operations	51,602,806	336,708,307	(163,716,655)	(104,765,492)
Impairment on equity investments	(179,733)	(1,172,755)	(4,666,128)	(1,386,174)
Fair value change on warrants liability	(5,801)	(37,851)	(1,292,244)	(2,251,427)
Gain on extinguishment of convertible notes	8,698,223	56,800,000	0	0
Gain on waiver of interest-free loan	5,424,904	35,397,500	0	0
Foreign exchange gain (loss)	(1,275,045)	(8,319,669)	(5,474,002)	(20,331,430)
Other expenses, net	307,302	2,005,143	9,372,652	1,598,663
Loss before income tax expense and share of loss in equity method investment	61,726,402	402,764,770	(193,321,480)	(234,991,909)
Share of loss in equity method investments	(331,944)	(2,165,935)	(2,847,260)	(4,292,887)
Income tax benefit	(1,098,099)	(7,165,097)	0	0
Net (loss) income	60,296,359	393,433,738	(196,168,740)	(239,284,796)
Other comprehensive income (loss), net of tax:
Currency translation adjustments	538,969	3,516,774	(793,531)	(1,314,265)
Total comprehensive loss	59,001,247	384,983,137	(172,368,564)	(209,851,734)
Parent Company
Operating expenses:
General and administrative	(13,431,213)	(87,638,664)	(68,165,230)	(21,435,150)
Total operating expenses	(13,431,213)	(87,638,664)	(68,165,230)	(21,435,150)
Loss from operations	(13,431,213)	(87,638,664)	(68,165,230)	(21,435,150)
Impairment on equity investments	(179,733)	(1,172,755)	0	0
Interest expenses	(447,978)	(2,923,055)	(33,154,189)	(98,308,205)
Fair value change on warrants liability	(5,801)	(37,851)	(1,292,244)	(2,251,427)
Gain on extinguishment of convertible notes	8,698,223	56,755,902	0	0
Gain on waiver of interest-free loan	5,424,904	35,397,500	0	0
Foreign exchange gain (loss)	4,533,096	29,578,454	(1,648,652)	1,963,364
Other expenses, net	(6,139,355)	(40,059,304)	(1,636,394)	(18,180,060)
Loss before income tax expense and share of loss in equity method investment	(1,536,255)	(10,024,071)	(103,312,222)	(133,708,624)
Share of loss in equity method investments	(331,944)	(2,165,935)	0	0
Equity in (loss) income of subsidiaries and VIEs	62,846,497	410,073,394	(74,482,946)	(83,384,302)
Net (loss) income	60,978,298	397,883,388	(177,795,168)	(217,092,926)
Other comprehensive income (loss), net of tax:
Currency translation adjustments	(1,977,050)	(12,900,251)	5,426,604	7,241,192
Total comprehensive loss	$ 59,001,248	¥ 384,983,137	¥ (172,368,564)	¥ (209,851,734)

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FINANCIAL INFORMATION OF PARENT COMPANY - CONDENSED BALANCE SHEETS (Details)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Current assets:
Cash and cash equivalents	$ 4,857,661	¥ 31,696,237	$ 1,549,907	¥ 10,113,141	¥ 4,256,449	¥ 142,624,020
Prepayments and other current assets, net	1,510,416	9,855,467		8,848,534
Total current assets	6,485,075	42,315,115		154,467,831
Investments in subsidiaries and VIEs				10,000,000
TOTAL ASSETS	7,423,955	48,441,307		181,459,156
Current liabilities:
Short-term borrowings				117,526,089
Warrants	284,285	1,854,957		198,600
Total current liabilities	55,842,573	364,372,791		1,058,082,595
TOTAL LIABILITIES	56,220,273	366,837,286		1,064,334,300
SHAREHOLDERS' EQUITY (DEFICIT)
Additional paid-in capital	413,143,757	2,695,763,016		2,539,552,478
Statutory reserves	1,122,844	7,326,560		28,071,982
Accumulated other comprehensive loss	(2,556,046)	(16,678,203)		(3,777,952)
Accumulated deficit	(458,578,915)	(2,992,227,421)		(3,410,856,231)
Total shareholders' deficit	(44,094,750)	(287,718,247)		(839,039,915)
Total liabilities and shareholders' equity	7,423,955	48,441,307		181,459,156
Parent Company
Current assets:
Cash and cash equivalents	1,309,719	8,545,918	$ 22,053	143,896	¥ 18	¥ 18,733
Prepayments and other current assets, net	626,853	4,090,219		63,873
Amounts due from intercompany	154,502,048	1,008,125,860		1,303,065,115
Total current assets	156,438,620	1,020,761,997		1,303,272,884
Investments in subsidiaries and VIEs	(198,561,332)	(1,295,612,695)		(1,681,526,537)
TOTAL ASSETS	(42,122,712)	(274,850,698)		(378,253,653)
Current liabilities:
Short-term borrowings	0	0		34,881,000
Accrued expenses and other current liabilities	1,687,754	11,012,592		11,578,754
Warrants	284,285	1,854,957		198,600
Convertible notes	0	0		414,127,908
Total current liabilities	1,972,039	12,867,549		460,786,262
TOTAL LIABILITIES	1,972,039	12,867,549		460,786,262
SHAREHOLDERS' EQUITY (DEFICIT)
Additional paid-in capital	413,143,757	2,695,763,016		2,539,552,478
Statutory reserves	1,122,844	7,326,560		28,071,982
Accumulated other comprehensive loss	(2,556,046)	(16,678,203)		(3,777,952)
Accumulated deficit	(458,578,915)	(2,992,227,421)		(3,410,856,231)
Total shareholders' deficit	(44,094,750)	(287,718,247)		(839,039,915)
Total liabilities and shareholders' equity	(42,122,711)	(274,850,698)		(378,253,653)
Class A Ordinary Shares
SHAREHOLDERS' EQUITY (DEFICIT)
Ordinary shares	2,635,565	17,197,060		7,321,099
Class A Ordinary Shares | Parent Company
SHAREHOLDERS' EQUITY (DEFICIT)
Ordinary shares	2,635,565	17,197,060		7,321,099
Class B ordinary shares
SHAREHOLDERS' EQUITY (DEFICIT)
Ordinary shares	138,045	900,741		648,709
Class B ordinary shares | Parent Company
SHAREHOLDERS' EQUITY (DEFICIT)
Ordinary shares	$ 138,045	¥ 900,741		¥ 648,709

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FINANCIAL INFORMATION OF PARENT COMPANY - CONDENSED STATEMENTS OF CASH FLOWS (Details)	12 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2019 CNY (¥)	Dec. 31, 2018 CNY (¥)
Cash flows from operating activities:
Net (loss) income	$ 60,296,359	¥ 393,433,738	¥ (196,168,740)	¥ (239,284,796)
Adjustments for:
Share-based compensation expenses	8,437,766	55,056,426	21,750,533	3,898,328
Fair value change on warrants liability	(5,801)	(37,851)	(1,292,244)	(2,251,427)
Amortization of discount and interest on convertible notes	448,018	2,923,316	33,154,191	98,308,205
Foreign exchange (gain) loss	1,275,045	8,319,669	5,474,002	20,331,430
Consulting fees paid by issuance of shares	1,039,359	6,781,815	35,091,686	4,172,800
Gain on extinguishment of convertible notes	(8,698,223)	(56,800,000)	0	0
Payment of issuance cost by issuance of shares Iliad	69,833	455,658	0	0
Changes in operating assets and liabilities
Change in prepayments and other current assets	(440,932)	(2,877,084)	(6,628,897)	(20,575,190)
Change in accounts payable	(403,833)	(2,635,008)	246,764	905,990
Change in accrued expenses and other current liabilities	(3,224,414)	(21,039,288)	11,896,337	(2,408,745)
Net cash (used in) provided by operating activities	(16,284,023)	(106,253,254)	(54,175,322)	(101,200,526)
Cash flows from financing activities:
Proceeds from the issuance of ordinary shares and warrants	7,268,995	47,430,195	0	0
Proceeds from the issuance of convertible note	514,693	3,358,369	0	0
Proceeds from other loans			34,881,000	0
Repayments of convertible notes	(48,878,103)	(318,929,623)	0	0
Net cash provided by (used in) financing activities	(47,614,742)	(310,686,195)	40,922,800	(18,357,011)
Net change in cash and cash equivalents	3,307,754	21,583,096	5,856,692	(138,367,571)
Cash and cash equivalents, beginning of period	1,549,907	10,113,141	4,256,449	142,624,020
Cash and cash equivalents, end of period	4,857,661	31,696,237	10,113,141	4,256,449
Supplement disclosure of cash flow information:
Interest paid	7,309,624	47,695,297	0	260,073
Income taxes paid	1,098,099	7,165,097	0	0
Parent Company
Cash flows from operating activities:
Net (loss) income	60,978,298	397,883,388	(177,795,168)	(217,092,926)
Adjustments for:
Share-based compensation expenses	8,437,766	55,056,426	21,705,240	3,645,751
Fair value change on warrants liability	(5,801)	(37,851)	(1,292,244)	(2,251,427)
Amortization of discount and interest on convertible notes	448,018	2,923,316	33,154,191	98,308,205
Foreign exchange (gain) loss	(4,533,096)	(29,578,454)	1,648,652	(1,963,364)
Equity in loss (income) of subsidiaries and VIEs	(62,846,497)	(410,073,394)	74,482,946	83,384,302
Consulting fees paid by issuance of shares	1,039,359	6,781,815	35,091,686	4,172,800
Gain on extinguishment of convertible notes	(8,698,223)	(56,755,902)	0	0
Gain on waiver of interest-free loan	(5,345,747)	(34,881,000)	0	0
Payment of issuance cost by issuance of shares Iliad	69,833	455,658	0	0
Changes in operating assets and liabilities
Change in prepayments and other current assets	(617,065)	(4,026,346)	(1,894)	(2,971)
Change in amounts due from intercompany	53,542,003	349,361,587	(28,060,447)	30,882,203
Change in accrued expenses and other current liabilities	(86,767)	(566,162)	6,329,916	898,712
Net cash (used in) provided by operating activities	42,382,081	276,543,081	(34,737,122)	(18,715)
Cash flows from financing activities:
Proceeds from the issuance of ordinary shares and warrants	7,268,995	47,430,195	0	0
Proceeds from the issuance of convertible note	514,693	3,358,369	0	0
Proceeds from other loans	0	0	34,881,000	0
Repayments of convertible notes	(48,878,103)	(318,929,623)	0	0
Net cash provided by (used in) financing activities	(41,094,415)	(268,141,059)	34,881,000	0
Net change in cash and cash equivalents	1,287,666	8,402,022	143,878	(18,715)
Cash and cash equivalents, beginning of period	22,053	143,896	18	18,733
Cash and cash equivalents, end of period	1,309,719	8,545,918	143,896	18
Supplement disclosure of cash flow information:
Interest paid	5,564,821	36,310,455	0	0
Income taxes paid	$ 0	¥ 0	¥ 0	¥ 0