EX-99.1 2 d665085dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

The9 Limited

Unaudited Financial Information as of and for the Six Months Ended June 30, 2018

In compliance with Nasdaq Stock Market Rule 5250(c)(2), The9 Limited (the “Company”) hereby furnishes its unaudited consolidated statement of income for the six months ended June 30, 2018 and its unaudited consolidated balance sheet as of June 30, 2018.

THE9 LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

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

 

     Six months ended June 30,  
     2017     2018     2018  
     RMB     RMB     US$  
                 (Note)  

Revenues:

      

Online game services

     14,764,789       9,948,160       1,503,402  

Other revenues

     998,950       543,277       82,102  
  

 

 

   

 

 

   

 

 

 
     15,763,739       10,491,437       1,585,504  

Sales taxes

     (4,478     (31,351     (4,738
  

 

 

   

 

 

   

 

 

 

Total net revenues

     15,759,261       10,460,086       1,580,766  

Cost of revenues

     (10,022,806     (8,364,700     (1,264,104
  

 

 

   

 

 

   

 

 

 

Gross profit

     5,736,455       2,095,386       316,662  
  

 

 

   

 

 

   

 

 

 

Operating expenses:

      

Product development

     (24,644,352     (12,171,876     (1,839,458

Sales and marketing

     (5,438,769     (1,516,067     (229,114

General and administrative

     (67,495,956     (28,016,337     (4,233,930

Gain on disposal of subsidiaries

     —         10,275,703       1,552,901  
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     (97,579,077     (31,428,577     (4,749,601

Other operating income

     175,880       112,530       17,006  
  

 

 

   

 

 

   

 

 

 

Loss from operations

     (91,666,742     (29,220,661     (4,415,933

Interest income (expenses), net

     (42,754,204     (51,110,526     (7,724,007

Fair value change on warrants liability

     3,843,386       2,919,044       441,136  

Gain on disposal of equity investee and available-for-sale investment

     115,349       —         —    

Other income (expenses), net

     7,574,538       (6,176,827     (933,464
  

 

 

   

 

 

   

 

 

 

Loss before income tax expense and share of loss in equity method investments

     (122,887,673     (83,588,970     (12,632,268

Share of loss in equity method investments

     (1,472,283     (1,627,241     (245,915
  

 

 

   

 

 

   

 

 

 

Net loss for the period

     (124,359,956     (85,216,211     (12,878,183

Net loss attributable to noncontrolling interest

     (8,122,462     (7,520,240     (1,136,486

Net loss attributable to redeemable noncontrolling interest

     (2,458,427     (2,701,193     (408,214
  

 

 

   

 

 

   

 

 

 

Net loss attributable to The9 Limited

     (113,779,067     (74,994,778     (11,333,483

Change in redemption value of redeemable noncontrollling interest

     (35,759,965     (22,913,753     (3,462,809
  

 

 

   

 

 

   

 

 

 

Net loss attributable to holders of ordinary shares

     (149,539,032     (97,908,531     (14,796,292
  

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss):

      

Currency translation adjustments

     731,780       (302,161     (45,664
  

 

 

   

 

 

   

 

 

 

Total comprehensive loss

     (123,628,176     (85,518,372     (12,923,847

Comprehensive loss attributable to:

      

Noncontrolling interest

     (4,221,606     (4,570,583     (690,723

Redeemable noncontrolling interest

     (2,458,427     (2,701,193     (408,214

The9 Limited

     (116,948,143     (78,246,596     (11,824,910

Net loss attributable to holders of ordinary shares per share

      

- Basic

     (6.25     (2.17     (0.33
  

 

 

   

 

 

   

 

 

 

- Diluted

     (6.25     (2.17     (0.33
  

 

 

   

 

 

   

 

 

 

Weighted average number of shares outstanding

      

- Basic

     23,915,501       45,172,579       45,172,579  
  

 

 

   

 

 

   

 

 

 

- Diluted

     23,915,501       45,172,579       45,172,579  
  

 

 

   

 

 

   

 

 

 

Note: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB6.6171, representing the noon buying rate on the last trading day of June 2018 (June 29, 2018) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.


THE9 LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS INFORMATION

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

 

     As of December 31,
2017
    As of June 30,
2018
    As of June 30,
2018
 
     RMB     RMB     US$  
                 (Note)  

Assets

      

Current Assets:

      

Cash and cash equivalents

     142,624,020       53,022,194       8,012,905  

Accounts receivable, net of allowance for doubtful accounts of RMB1,039,958 as of both December 31, 2017 and June 30, 2018

     2,607,568       3,379,912       510,784  

Advances to suppliers

     8,102,278       25,417,262       3,841,148  

Prepayments and other current assets

     6,616,297       24,895,752       3,762,336  

Amounts due from related parties

     2,492,842       3,515,361       531,254  

Assets classified as held for sale

     20,669,377       —         —    
  

 

 

   

 

 

   

 

 

 

Total current assets

     183,112,382       110,230,481       16,658,427  

Investments in equity investees

     48,243,558       49,778,666       7,522,731  

Property, equipment and software, net

     20,721,252       18,845,645       2,848,022  

Land use right, net

     64,510,566       63,550,111       9,603,922  

Other long-lived assets, net

     6,521,420       6,520,200       985,356  
  

 

 

   

 

 

   

 

 

 

Total Assets

     323,109,178       248,925,103       37,618,458  
  

 

 

   

 

 

   

 

 

 

Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity (Deficit)

      

Current Liabilities:

      

Short-term borrowings

     108,743,369       109,577,423       16,559,735  

Accounts payable

     37,129,671       36,718,115       5,548,974  

Other taxes payable

     1,714,992       1,185,460       179,151  

Advances from customers

     47,558,542       42,637,802       6,443,578  

Amounts due to related parties

     88,939,108       79,856,772       12,068,243  

Deferred revenue

     5,576,269       4,869,812       735,944  

Refund of game points

     169,998,682       169,998,682       25,690,813  

Warrants

     3,742,271       823,228       124,409  

Convertible notes

     260,563,020       313,211,813       47,333,698  

Interest payables

     9,505,843       11,928,621       1,802,696  

Accrued expense and other current liabilities

     83,700,051       75,200,845       11,364,623  

Liabilities directly associated with assets classified as held for sale

     2,273,532       —         —    
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     819,445,350       846,008,573       127,851,864  
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     819,445,350       846,008,573       127,851,864  
  

 

 

   

 

 

   

 

 

 

Redeemable noncontrolling interest

     306,014,668       326,227,228       49,300,634  

Shareholders’ Equity (Deficit)

      

Ordinary shares (US$0.01 par value; 44,544,036 and 48,115,465 shares issued and outstanding as of December 31, 2017 and June 30, 2018, respectively)

     3,328,852       3,555,409       537,306  

Additional paid-in capital

     2,527,215,315       2,508,724,835       379,127,538  

Statutory reserves

     28,071,982       28,071,982       4,242,339  

Accumulated other comprehensive loss

     (16,445,748     (13,798,254     (2,085,242

Accumulated deficit

     (3,015,968,137     (3,090,963,986     (467,117,616
  

 

 

   

 

 

   

 

 

 

The9 Limited shareholders’ deficit

     (473,797,736     (564,410,014     (85,295,675

Noncontrolling interest

     (328,553,104     (358,900,684     (54,238,365
  

 

 

   

 

 

   

 

 

 

Total shareholder’s deficit

     (802,350,840     (923,310,698     (139,534,040
  

 

 

   

 

 

   

 

 

 

Total liabilities, redeemable noncontrolling interest and shareholders’ equity (deficit)

     323,109,178       248,925,103       37,618,458  
  

 

 

   

 

 

   

 

 

 

Note: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers at the rate of US$1.00 = RMB6.6171, representing the noon buying rate on the last trading day of June 2018 (June 29, 2018) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.


About The9 Limited

The9 Limited is an Internet company based in China. The9 has stepped into blockchain-related business. The9 also develops and/or operates, directly or through its affiliates, its proprietary mobile games, including the CrossFire brand new shooting mobile game, Audition mobile and Fashion Pop.