SHENZHEN, China, Feb. 8, 2021 /PRNewswire/ -- 500.com Limited
(NYSE: WBAI) ("500.com," "the Company," "we," "us," "our company,"
or "our"), an online sports lottery service provider in
China, today reported its
unaudited financial results for the fourth quarter and full
year ended December 31, 2020.
Announcement of Private Placement, Appointment of New
Officers and Exploration of Business Opportunities in the
Blockchain and Cryptocurrency Industries
On December 21, 2020, the Company
announced that it had entered into a definitive share
subscription agreement (the "Agreement") with Good Luck Information
Technology Co., Limited ("Good Luck Information"), a company
incorporated in Hong Kong, for the
issuance and sale of newly issued Class A ordinary shares of the
Company ("Class A Shares").
Pursuant to the Agreement, Good Luck Information will purchase
85,572,963 newly issued Class A Shares for a total purchase price
of approximately US$23 million, of
which 50% of the subscription price, or approximately US$11.5 million, shall be settled by U.S.
dollars, with the remaining 50% of the subscription price, or
approximately US$11.5 million, being
settled by Bitcoin.
Good Luck Information has agreed to subject all the shares it or
its affiliate will acquire in the transaction to a contractual
lock-up restriction for 180 days after the closing. The closing is
expected to take place on or before February
20, 2021, upon satisfaction of customary closing
conditions.
Good luck Information is controlled by Mr. Man San Vincent Law, a founder of the Company,
who currently holds less than 5% of the Company's outstanding share
capital. Upon closing, Good Luck Information will hold 16.6% of the
Company's issued and outstanding ordinary shares.
The Company's Board of Directors (the "Board") has proposed that
the Company explore business opportunities in the blockchain and
cryptocurrency industries based on some success experience of its
associate, Loto Interactive Limited. The Board appointed Mr.
Xianfeng Yang as the Chief Executive
Officer of the Company, and Mr. Bo
Yu as the Chief Operating Officer of the Company, both
effective December 21, 2020.
The Company has entered into a definitive purchase agreement
with certain non-U.S. persons (the "Sellers") pursuant to which the
Company expects to issue approximately US$14.4 million worth of its Class A Shares as
consideration to acquire bitcoin mining machines owned by the
Sellers.
The Company has further entered into a definitive purchase
agreement (the "Purchase Agreement") for 5,900 bitcoin mining
machines for a total consideration of approximately RMB55.2 million (approximately US$8.5 million). All of the bitcoin mining
machines are expected to be delivered in the second quarter of
2021. Concurrently with the Purchase Agreement, the Company has
entered into a framework agreement (the "Framework Agreement"),
pursuant to which the Company has agreed in principle to purchase
up to 10,000 bitcoin mining machines in 2021, subject to
availability and certain other conditions. The Company is required
to pay a performance bond of RMB2,000
per machine for the first 5,000 machines, or RMB10 million (approximately US$1.5 million) in aggregate. Assuming full
delivery of the 15,900 bitcoin mining machines, the Company's total
hash rate will be increased by approximately 1,000 petahashes per
second (PH/S).
Subscribe for Shares of Loto Interactive Limited
The Company has entered into a share subscription agreement,
pursuant to which it has conditionally agreed to subscribe for
169,354,839 shares of Loto Interactive Limited (HKEX: 08198) ("Loto
Interactive") at a price of HK$0.62
per share for a total consideration of approximately HK$105 million (approximately US$13.5 million) in cash (the "Share
Subscription"). The Company currently owns approximately 33.7%
of the issued share capital of Loto Interactive. Upon completion of
the Share Subscription, the Company expects to own approximately
54.2% of the issued share capital of Loto Interactive, and Loto
Interactive is expected to become a subsidiary of the Company.
Annual Report on Form 20-F for the Fiscal Year ended
December 31, 2019
The Company filed a Current Report on Form 6-K, or the COVID-19
Relief 6-K, in compliance with and reliance upon the SEC's Order
under Section 36 of the Securities Exchange Act of 1934, as
amended, or the Exchange Act, granting Exemptions from Specified
Provisions of the Exchange Act and certain Rules thereunder
(Release No. 34-88318), dated March 4,
2020, or the Relief Order. The Company relied on the Relief
Order to delay the filing of its Annual Report on Form 20-F for the
fiscal year ended December 31, 2019,
or the 2019 Annual Report, due to circumstances related to
COVID-19. Absent the Relief Order, the 2019 Annual Report was due
to be filed by April 30, 2020.
The Company was unable to file the 2019 Annual Report on a
timely basis as a result of, among other things, travel
restrictions, quarantines and staffing issues due to circumstances
related to COVID-19. The Company's headquarters and operations are
located in Shenzhen, China.
Following the outbreak of COVID-19, the PRC government introduced
temporary travel restrictions and mandatory quarantines aimed at
preventing the spread of COVID-19 within China. While some of these restrictions and
quarantines were relaxed in certain areas, the Company took
pro-active measures to help protect its employees by implementing
self-quarantine measures of at least 14 days for employees that
traveled from other regions within China before they were allowed to report to
the Company's offices. As of April 29,
2020, the date of the COVID-19 Relief 6-K, Friedman LLP, the
Company's former independent registered public accounting firm, had
not completed its audit of the Company's financial statements and
audit of the Company's internal control over financial reporting as
of December 31, 2019, due to the
impact of COVID-19, and the previously reported internal
investigation being conducted by King & Wood Mallesons LLP was
still in progress. As a result of the foregoing, the Company was
unable to timely file its 2019 Annual Report by April 30, 2020. The Company supplemented its 2019
Annual Report with an additional risk factor relating to COVID-19.
See "Item 3. Key Information—D. Risk Factors—Risks Related to Our
Business and Industry—The ongoing COVID-19 pandemic could
materially and adversely affect our business, results of operations
and financial condition" in the 2019 Annual Report.
The Company filed a Form 12b-25 with the SEC on June 15, 2020 for late filing of its 2019 Annual
Report. Absent the Form 12b-25, the 2019 Annual Report was due to
be filed by June 15, 2020, pursuant
to the COVID-19 Relief 6-K dated April 29,
2020. As of June 15, 2020, the
date of the Form 12b-25 filing, the internal investigation being
conducted by King & Wood Mallesons LLP was still in progress.
Accordingly, the Company was then unable to conclude what impact it
may have on the Company's financial statements and internal control
over financial reporting. In addition, Friedman LLP, the Company's
former independent registered public accounting firm, had not
completed its audit of the Company's financial statements and audit
of the Company's internal control over financial reporting as of
December 31, 2019, due to the impact
of COVID-19 and because the abovementioned internal investigation
was still in progress.
As of July 1, 2020, the Company
was delinquent in filing its 2019 Annual Report with the SEC.
Pursuant to the Form 12b-25 filing dated June 15, 2020, the 2019 Annual Report was due to
be filed by June 30, 2020. On
July 1, 2020, the Company received an
expected notice from New York Stock Exchange ("NYSE") Regulation
stating that the Company is not in compliance with the NYSE's
continued listing requirements under the timely filing criteria
pursuant to Section 802.01E of the NYSE Listed Company Manual as a
result of the Company's failure to timely file the 2019 Annual
Report with the SEC. As required by the notice, (a) a
representative of the Company contacted the NYSE on July 1, 2020 to discuss the status of the 2019
Annual Report, and (b) the Company issued a press release dated
July 7, 2020, disclosing the status
of the 2019 Annual Report, noting the delay and the reason for the
delay, as mentioned above. The anticipated filing date of the 2019
Annual Report was not then known. NYSE Regulation notified the
Company that the NYSE would closely monitor the status of the
Company's late filing and related public disclosures for up to a
six-month period from the due date of the 2019 Annual Report, or
December 31, 2020, and that the
Company would need to timely file its 2019 Annual Report and any
subsequent delayed filings by December 31,
2020.
On September 23, 2020, Friedman
LLP resigned as the Company's auditor. The Company appointed
MaloneBailey, LLP on September 27,
2020 to conduct an audit of the Company's consolidated
financial statements for the fiscal year ended December 31, 2019 and effectiveness of its
internal control as of December 31,
2019, and to re-audit the Company's consolidated financial
statements for each of the fiscal years ended December 31, 2017 and 2018. The Company announced
the resignation of Friedman LLP and the appointment of
MaloneBailey, LLP in a press release dated September 28, 2020. See "Item 16F. Change in
Registrant's Certifying Accountant" in the 2019 Annual Report.
On October 7, 2020, the Company
announced that the SIC of the Company's Board completed its
internal investigation. King & Wood Mallesons LLP presented its
investigation review to SIC on October 7,
2020. Based on the findings and analyses in the review by
King & Wood Mallesons LLP, the SIC concluded that it did not
find a sufficient basis to establish a violation of the U.S.
Foreign Corrupt Practices Act of 1977 in connection with the
Company's prior activities in Japan. The SIC also reviewed the Company's
compliance policies, procedures and internal controls in light of
the suggestions from King & Wood Mallesons LLP. The Company
updated such policies, procedures and internal controls based on
recommendations from the SIC, and will continue to enhance its
internal controls as appropriate.
Once the abovementioned internal investigation was completed,
the Company's financial statements for the fiscal year ended
December 31, 2019 were finalized, the
re-audit of the Company's consolidated financial statements for
each of the fiscal years ended December 31,
2017 and 2018 was completed, and both the Company and
MaloneBailey, LLP completed their assessment of the Company's
internal control over financial reporting as of December 31, 2019, the Company successfully filed
its 2019 Annual Report on December 11,
2020.
Fourth Quarter
2020 Highlights
- Net revenues were RMB9.0 million
(US$1.4 million), compared with net
revenues of RMB6.1 million for the
third quarter of 2020, and net revenues of RMB8.6 million for the fourth quarter of
2019.
- Operating loss was RMB51.4
million (US$7.9 million),
compared with operating loss of RMB50.2
million for the third quarter of 2020, and operating loss of
RMB307.1 million for the fourth
quarter of 2019.
- Non-GAAP[1] operating loss was RMB32.4 million (US$5.0
million), compared with non-GAAP operating loss of
RMB37.6 million for the third quarter
of 2020, and non-GAAP operating loss of RMB68.5 million for the fourth quarter of
2019.
- Net loss attributable to 500.com was RMB56.1 million (US$8.6
million), compared with net loss attributable to 500.com of
RMB44.0 million for the third quarter
of 2020, and net loss attributable to 500.com of RMB322.7 million for the fourth quarter of
2019.
- Non-GAAP net loss attributable to 500.com was RMB37.5 million (US$5.7
million), compared with non-GAAP net loss attributable to
500.com of RMB31.6 million for the
third quarter of 2020, and non-GAAP net loss attributable to
500.com of RMB69.4 million for the
fourth quarter of 2019.
- Basic and diluted losses per ADS were RMB1.30 (US$0.20).
- Non-GAAP basic and diluted losses per ADS were RMB0.87 (US$0.13).
Full Year 2020 Highlights
- Net revenues were RMB21.8 million
(US$3.3 million), compared with net
revenues of RMB39.7 million for full
year 2019.
- Operating loss was RMB190.8
million (US$29.2 million),
compared with operating loss of RMB642.8
million for full year 2019.
- Non-GAAP operating loss was RMB135.4
million (US$20.8 million),
compared with non-GAAP operating loss of RMB252.0 million for full year 2019.
- Net loss attributable to 500.com was RMB223.2 million (US$34.2
million), compared with net loss attributable to 500.com of
RMB651.3 million for full year
2019.
- Non-GAAP net loss attributable to 500.com was RMB138.5 million (US$21.2
million), compared with non-GAAP net loss attributable to
500.com of RMB245.7 million for full
year 2019.
- Basic and diluted losses per ADS were RMB5.19 (US$0.80).
- Non-GAAP basic and diluted losses per ADS were RMB3.22 (US$0.49)
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[1]
Non-GAAP financial measures exclude the impact of share-based
compensation expenses, impairment of acquired intangible assets,
impairment of goodwill, impairment of long-term investments
and deferred tax benefit relating to valuation allowance.
Reconciliations of non-GAAP financial measures to U.S. GAAP
financial measures are set forth in the table at the end of this
release.
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Fourth Quarter 2020 Financial
Results
Net Revenues
Net revenues were RMB9.0 million
(US$1.4 million) for the fourth
quarter of 2020, representing a slight increase of
RMB0.4 million or 4.7% from
RMB8.6 million for the fourth quarter
of 2019 and an increase of RMB2.9
million or 47.5% from RMB6.1
million for the third quarter of 2020. Net
revenues during the fourth quarter of 2020 primarily consisted of
RMB5.6 million (EUR0.7 million) in revenue contribution
from the Company's online lottery betting and online casino in
Europe through TMG, which
accounted for 62.2% of total net revenues. The sequential increase
was mainly attributable to an increase of RMB2.3 million in revenue contribution from TMG,
and an increase of RMB0.6 million in
sports information services in China that have been provided since early
2020.
Operating Expenses
Operating expenses were RMB60.9
million (US$9.3 million) for
the fourth quarter of 2020, representing a decrease of RMB31.6 million or 34.2% from RMB92.5 million for the fourth quarter of
2019, and an increase of RMB4.7
million or 8.4% from RMB56.2 million for the third quarter of
2020. The year-over-year decrease was mainly due to a decrease
of RMB13.7 million in bad debt
provision of receivables, a decrease of RMB11.0 million mainly in depreciation associated
with leasehold improvements for the partial termination of office
lease in Shenzhen and amortization
associated with full impairment of acquired intangible assets in
2019, a decrease of RMB6.1 million in
rental expenses mainly resulting from the partial termination of
office lease in Shenzhen and the
termination of office leases in Hong
Kong and Japan due to
closure of subsidiaries' local offices , a decrease of RMB4.9 million in expenses for employees as a
result of decrease in headcount, a decrease of RMB1.2 million in travelling expenses, and a
decrease of RMB1.1 million in
marketing and promotional expenses relating to a change in TMG's
marketing strategy, which were partially offset by an increase
of RMB3.9 million in share-based
compensation expenses associated with share options granted to the
Company's employees and an increase of RMB3.6 million in consulting expenses. The
sequential increase was mainly due to an increase of RMB11.7 million in rental expenses mainly
resulting from the partial termination of office lease in
Shenzhen in August 2020, which led to a reversal of accrued
rental expenses in prior years during the third quarter of 2020, an
increase of RMB10.1 million in
expenses for employees, an increase of RMB6.4 million in share-based compensation
expenses associated with share options granted to the Company's
employees, and an increase of RMB1.0 million in lottery
insurance costs for TMG, which were partially offset by a decrease
of RMB23.2 million mainly in
depreciation associated with leasehold improvements for the partial
termination of office lease in Shenzhen and a decrease of RMB1.2 million for bad debt provision of
receivables.
Cost of services was RMB4.4 million (US$0.7 million) for the fourth quarter of
2020, representing a decrease of RMB7.8
million or 63.9% from RMB12.2 million for the fourth quarter
of 2019, and a slight increase of RMB0.6
million or 15.8% from RMB3.8 million for
the third quarter of 2020. The year-over-year decrease
was mainly attributable to a decrease of RMB6.9 million in amortization mainly associated
with full impairment of acquired intangible assets in 2019. The
sequential increase was mainly attributable to an increase
of RMB1.0 million in lottery insurance costs for TMG.
Sales and marketing expenses were RMB4.6 million (US$0.7 million) for the fourth quarter of
2020, representing a decrease of RMB4.5
million or 49.5% from RMB9.1 million for
the fourth quarter of 2019, and a slight increase of
RMB0.4 million or 9.5% from
RMB4.2 million for the third quarter
of 2020. The year-over-year decrease was mainly attributable
to a decrease of RMB2.1 million in
expenses for employees, a decrease of RMB1.1
million in marketing and promotional expenses relating to a
change in TMG's marketing strategy, and a decrease of
RMB0.7 million in share-based
compensation expenses associated with share options granted to the
Company's employees. The sequential increase was mainly due to an
increase of RMB1.3 million in
expenses for employees, which was partially offset by
a decrease of RMB1.1 million in
share-based compensation expenses associated with share options
granted to the Company's employees.
General and administrative expenses were RMB40.9 million (US$6.3
million) for the fourth quarter of 2020, representing a
decrease of RMB18.4 million or
31.0% from RMB59.3 million for
the fourth quarter of 2019, and a decrease of RMB5.5 million or 11.9% from RMB46.4 million for the third quarter
of 2020. The year-over-year decrease was mainly due to a
decrease of RMB13.7 million in bad
debt provision of receivables, a decrease of RMB4.6 million in expenses for employees as a
result of decrease in headcount, a decrease of RMB4.2 million mainly in depreciation associated
with leasehold improvements for the partial termination of office
lease in Shenzhen, a decrease of
RMB4.0 million in rental expenses
mainly resulting from the partial termination of office lease in
Shenzhen and the termination of
office leases in Hong Kong and
Japan due to closure of
subsidiaries' local offices, and a decrease of RMB0.9 million in travelling expenses, which were
partially offset by an increase of RMB5.4 million in share-based compensation
expenses associated with share options granted to the Company's
employees and an increase of RMB3.7
million in consulting expenses. The sequential decrease
was mainly due to a decrease of RMB23.3
million mainly in depreciation associated with leasehold
improvements for the partial termination of office lease in
Shenzhen and a decrease of
RMB1.2 million for bad debt provision
of receivables, which were partially offset by an increase of
RMB8.9 million in share-based
compensation expenses associated with share options granted to the
Company's employees, an increase of RMB5.8
million in rental expenses mainly resulting from the partial
termination of office lease in Shenzhen in August
2020, which led to a reversal of accrued rental expenses in
prior years during the third quarter of 2020, and an increase of
RMB4.1 million in expenses for
employees.
Service development expenses were RMB11.1 million (US$1.7 million) for the fourth quarter of 2020,
representing a decrease of RMB0.8
million or 6.7% from RMB11.9 million for the fourth quarter
of 2019, and an increase of RMB9.3
million or 516.7% from RMB1.8 million for the third quarter of
2020. The year-over-year decrease was mainly due to a decrease
of RMB1.9 million in rental expenses
mainly resulting from the partial termination of office lease in
Shenzhen and a decrease of RMB0.8
million in share-based compensation expenses associated with
share options granted to the Company's employees, which were
partially offset by an increase of RMB1.8
million in expenses for employees. The sequential increase
was mainly due to an increase of RMB6.0
million in rental expenses mainly resulting from the partial
termination of office lease in Shenzhen in August
2020, which led to a reversal of accrued expenses in prior
years during the third quarter of 2020 and an increase of
RMB4.7 million in expenses for
employees, which were partially offset by a decrease of
RMB1.4 million in share-based
compensation expenses associated with share options granted to the
Company's employees.
Impairments of Goodwill
and Acquired Intangible assets
The impairments of goodwill and acquired intangible assets were
related to the Company's acquisition of TMG, which were triggered
by TMG's temporary suspension of its operations in Sweden between January
2020 and September 2020.
Impairment of goodwill and acquired intangible assets were
RMB41.6 million and RMB181.8 million, respectively, for the fourth
quarter of 2019. There was no additional impairment of goodwill and
acquired intangible assets for the third and fourth quarters of
2020 as the related goodwill and intangible assets were fully
impaired as of December 31, 2019.
Operating Loss
Operating loss was RMB51.4 million (US$7.9 million) for the fourth quarter of 2020,
compared with operating loss of RMB307.1 million for
the fourth quarter of 2019, and operating loss of
RMB50.2 million for the
third quarter of 2020. The year-over-year decrease was mainly
due to (i) an impairment provision of RMB41.6 million provided for goodwill, and an
impairment provision of RMB181.8
million provided for acquired intangible assets, during the
fourth quarter of 2019, while there was no such impairment during
the fourth quarter of 2020, and (ii) a decrease of RMB31.6 million in operating expenses due to cost
reduction measures implemented by management. The sequential
increase was not material.
Non-GAAP operating loss was RMB32.4
million (US$5.0 million) for
the fourth quarter of 2020, compared with non-GAAP operating
loss of RMB68.5 million for
the fourth quarter of 2019, and non-GAAP operating loss
of RMB37.6 million for the
third quarter of 2020. The year-over-year decrease was mainly
due to a decrease of RMB35.5 million
in Non-GAAP operating expenses due to cost reduction measures
implemented by management. The sequential decrease was mainly
attributable to an increase of RMB2.9
million in revenue and a decrease of RMB1.7 million in Non-GAAP operating
expenses.
Net Loss Attributable to
500.com
Net loss attributable to 500.com was RMB56.1 million (US$8.6 million) for the fourth quarter of 2020,
compared with net loss attributable to 500.com of RMB322.7 million for
the fourth quarter of 2019, and net loss attributable to
500.com of RMB44.0 million for
the third quarter of 2020. The year-over-year decrease was
mainly due to (i) an impairment provision of RMB41.6 million provided for goodwill, and an
impairment provision of RMB181.8
million provided for acquired intangible assets, during the
fourth quarter of 2019, while there was no such impairment during
the fourth quarter of 2020, (ii) a decrease of RMB31.6 million in operating expenses due to cost
reduction measures implemented by management, (iii) a decrease of
RMB22.4 million in impairment of
equity investments, and (iv) a decrease of RMB7.0 million in deferred tax benefit relating
to valuation allowance. The sequential increase was mainly due to
an increase of RMB4.7 million in
operating expenses, and (ii) an increase of RMB11.5 million in losses from equity method
investments, which were partially offset by an increase of
RMB2.9 million in revenue.
Non-GAAP net loss attributable to 500.com was RMB37.5 million (US$5.7
million) for the fourth quarter of 2020, compared with
non-GAAP net loss attributable to 500.com of RMB69.4 million for the fourth quarter
of 2019, and non-GAAP net loss attributable to 500.com of
RMB31.6 million for
the third quarter of 2020. The year-over-year decrease
was mainly due to a decrease of RMB35.5
million in Non-GAAP operating expenses due to cost reduction
measures implemented by management. The sequential increase was
mainly attributable to an increase of RMB11.5 million in losses from equity method
investments, which were partially offset by an increase of
RMB2.9 million in revenue and a
decrease of RMB1.7 million in
Non-GAAP operating expenses.
Cash and Cash Equivalents, Restricted Cash, Time Deposits and
Short-term Investments
As of December 31, 2020, the
Company had cash and cash equivalents of RMB308.7 million (US$47.3 million) and restricted
cash[2] of RMB3.8 million (US$0.6 million), compared with cash and cash
equivalents of RMB278.4 million,
restricted cash of RMB2.4 million,
time deposits[3] of RMB0.2
million and short-term investments[4] of
RMB50.0 million as of
September 30, 2020.
Prepayments and Other Current Assets
As of December 31, 2020, the balance of prepayment and
other current assets was RMB23.0 million (US$3.5 million), compared with RMB23.5 million as of September 30, 2020. The balance as of
December 31, 2020 mainly included:
(i) the current portion of deferred expenses of RMB2.9 million (US$0.4 million); (ii) receivables from
third party payment providers of RMB2.3
million (US$0.4 million);
(iii) deposit receivables of RMB0.6
million (US$0.1 million);
(iv) deductible value added input tax of RMB11.6 million (US$1.8 million); and (v) other receivables
of RMB5.6 million (US$0.8 million).
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[2]
Restricted cash represents: (i) government grants received but
pending final clearance; and (ii) deposits in merchant banks yet to
be withdrawn.
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[3] Time
deposit represents deposits in commercial banks with original
maturities of greater than three months but less than a
year.
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[4]
Short-term investment represents investments in structured
financial products provided by financial institutions in the PRC
with an initial maturity of six months.
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Business Outlook
The Company does not expect to issue any earnings forecast at
present.
Currency Convenience Translation
This announcement contains translations of certain Renminbi
amounts into U.S. dollars at specified rates solely for the
convenience of readers. Unless otherwise noted, all translations
from Renminbi to U.S. dollars were made at the exchange rate of
RMB6.5250 to US$1.00, as set forth in the H.10 statistical
release of the Federal Reserve Board on December 31, 2020, and all translations from
Renminbi to Euros were made at the exchange rate of RMB7.9065 to EUR1.00, which was the average of the month-end
exchange rates as set forth in the statistical release of State
Administration of Foreign Exchange at the end of each month in
2020.
About 500.com Limited
500.com Limited (NYSE: WBAI) is an online sports lottery service
provider in China. The Company
offers a comprehensive and integrated suite of online lottery
services, information, user tools and virtual community venues to
its users. Most recently, 500.com is actively developing its
block-chain related business.
Safe Harbor Statements
This news release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates," "target,"
"going forward," "outlook" and similar statements. Such statements
are based upon management's current expectations and current market
and operating conditions, and relate to events that involve known
or unknown risks, uncertainties and other factors, all of which are
difficult to predict and many of which are beyond the Company's
control, which may cause the Company's actual results, performance
or achievements to differ materially from those in the
forward-looking statements. Further information regarding these and
other risks, uncertainties or factors is included in the Company's
filings with the U.S. Securities and Exchange Commission. The
Company does not undertake any obligation to update any
forward-looking statement as a result of new information, future
events or otherwise, except as required under law.
About Non-GAAP Financial Measures
To supplement the Company's financial results presented in
accordance with U.S. GAAP, the Company uses non-GAAP financial
measures, which are adjusted from results based on U.S. GAAP to
exclude share-based compensation expenses in the Company's
consolidated affiliated entities. Reconciliations of non-GAAP
financial measures to U.S. GAAP financial measures are set forth in
table at the end of this release, which provide more details on the
non-GAAP financial measures.
Non-GAAP financial information is provided as additional
information to help investors compare business trends among
different reporting periods on a consistent basis and to enhance
investors' overall understanding of the historical and current
financial performance of the Company's continuing operations and
prospects for the future. Non-GAAP financial information should not
be considered a substitute for or superior to U.S. GAAP results. In
addition, calculations of this non-GAAP financial information may
be different from calculations used by other companies, and
therefore comparability may be limited.
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500.com
Limited
Condensed Consolidated Balance Sheets
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"),
except for number of shares)
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December 31,
2019
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December 31,
2020
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December 31,
2020
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RMB
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RMB
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US$
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Audited
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Unaudited
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Unaudited
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ASSETS
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Current
assets:
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|
Cash and cash
equivalents
|
|
361,220
|
|
308,676
|
47,307
|
|
Restricted
cash
|
|
4,576
|
|
3,829
|
587
|
|
Time
deposits
|
|
23,849
|
|
-
|
-
|
|
Amounts due from
related parties
|
|
10,401
|
|
368
|
56
|
|
Prepayments and other
current assets
|
|
30,280
|
|
22,980
|
3,522
|
|
Total current
assets
|
|
430,326
|
|
335,853
|
51,472
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property and
equipment, net
|
|
64,112
|
|
19,779
|
3,031
|
|
Intangible assets,
net
|
|
4,505
|
|
2,398
|
368
|
|
Deposits
|
|
5,388
|
|
1,480
|
227
|
|
Long-term
investments
|
|
152,954
|
|
99,972
|
15,321
|
|
Right-of-use
assets
|
|
36,607
|
|
9,327
|
1,429
|
|
Other non-current
assets
|
|
1,887
|
|
1,664
|
255
|
|
Total non-current
assets
|
|
265,453
|
|
134,620
|
20,631
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
695,779
|
|
470,473
|
72,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accrued payroll
and welfare payable
|
|
6,879
|
|
13,401
|
2,054
|
|
Accrued
expenses and other current liabilities
|
|
51,398
|
|
55,960
|
8,577
|
|
Income tax
payable
|
|
2,213
|
|
549
|
84
|
|
Operating lease
liabilities - current
|
|
16,672
|
|
3,710
|
569
|
|
Total current
liabilities
|
|
77,162
|
|
73,620
|
11,284
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
payables
|
|
2,965
|
|
526
|
81
|
|
Deferred tax
liabilities
|
|
59
|
|
-
|
-
|
|
Operating lease
liabilities - non-current
|
|
31,675
|
|
5,807
|
890
|
|
Total non-current
liabilities
|
|
34,699
|
|
6,333
|
971
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
111,861
|
|
79,953
|
12,255
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
14,849
|
|
-
|
-
|
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
Class A ordinary
shares, par value US$0.00005 per share,
700,000,000 shares authorized as of December 31, 2019
and December 31, 2020; 420,001,792 and 430,127,692
shares issued and outstanding as of December 31, 2019
and December 31, 2020, respectively
|
|
145
|
|
148
|
22
|
|
Class B ordinary
shares, par value US$0.00005 per share;
300,000,000 shares authorized as of December 31, 2019
and December 31, 2020; 10,000,099 and 99 shares issued
and outstanding as of December 31, 2019 and December
31, 2020, respectively
|
|
6
|
|
3
|
-
|
|
Additional paid-in
capital
|
|
2,547,293
|
|
2,602,883
|
398,909
|
|
Treasury
shares
|
|
(143,780)
|
|
(143,780)
|
(22,035)
|
|
Accumulated
deficit
|
|
(1,960,692)
|
|
(2,183,918)
|
(334,700)
|
|
Accumulated other
comprehensive income
|
|
141,484
|
|
128,441
|
19,684
|
|
Total 500.com
Limited shareholders' equity
|
|
584,456
|
|
403,777
|
61,880
|
|
Noncontrolling
interests
|
|
(15,387)
|
|
(13,257)
|
(2,032)
|
|
Total
shareholders' equity
|
|
569,069
|
|
390,520
|
59,848
|
|
|
|
|
|
|
|
TOTAL LIABILITIES,
NONCONTROLLING INTEREST AND
SHAREHOLDERS' EQUITY
|
|
695,779
|
|
470,473
|
72,103
|
|
500.com
Limited
Condensed Consolidated Statements of Comprehensive Loss
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars
("US$"),
except for number of shares, per share (or ADS)
data)
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
December 31,
2019
|
|
September 30,
2020
|
|
December 31,
2020
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
December 31,
2020
|
|
|
RMB
|
|
RMB
|
|
RMB
|
US$
|
|
RMB
|
|
RMB
|
US$
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Unaudited
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
Net
Revenues
|
|
8,585
|
|
6,145
|
|
8,958
|
1,373
|
|
39,688
|
|
21,815
|
3,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
(12,214)
|
|
(3,824)
|
|
(4,350)
|
(667)
|
|
(59,410)
|
|
(16,774)
|
(2,571)
|
|
Sales and marketing expenses
|
|
(9,133)
|
|
(4,158)
|
|
(4,550)
|
(697)
|
|
(42,445)
|
|
(16,748)
|
(2,567)
|
|
General and administrative expenses
|
|
(59,261)
|
|
(46,401)
|
|
(40,891)
|
(6,267)
|
|
(223,758)
|
|
(152,541)
|
(23,378)
|
|
Service development expenses
|
|
(11,930)
|
|
(1,840)
|
|
(11,145)
|
(1,708)
|
|
(48,614)
|
|
(30,201)
|
(4,629)
|
|
Total operating
expenses
|
|
(92,538)
|
|
(56,223)
|
|
(60,936)
|
(9,339)
|
|
(374,227)
|
|
(216,264)
|
(33,145)
|
|
Other operating income
|
|
840
|
|
487
|
|
487
|
75
|
|
6,788
|
|
5,518
|
846
|
|
Government grant
|
|
218
|
|
246
|
|
304
|
47
|
|
3,504
|
|
891
|
137
|
|
Other operating expenses
|
|
(740)
|
|
(892)
|
|
(254)
|
(39)
|
|
(6,995)
|
|
(2,752)
|
(422)
|
|
Impairment of intangible assets
|
|
(181,845)
|
|
-
|
|
-
|
-
|
|
(181,845)
|
|
-
|
-
|
|
Impairment of goodwill
|
|
(41,618)
|
|
-
|
|
-
|
-
|
|
(129,752)
|
|
-
|
-
|
|
Operating
loss
|
|
(307,098)
|
|
(50,237)
|
|
(51,441)
|
(7,883)
|
|
(642,839)
|
|
(190,792)
|
(29,241)
|
|
Other income (expenses), net
|
|
67
|
|
(2)
|
|
9
|
1
|
|
455
|
|
748
|
115
|
|
Interest income
|
|
3,042
|
|
2,225
|
|
1,923
|
295
|
|
13,448
|
|
9,093
|
1,394
|
|
(Loss) income from equity method investments
|
|
(3,029)
|
|
4,338
|
|
(7,156)
|
(1,097)
|
|
(10,639)
|
|
(10,798)
|
(1,655)
|
|
Impairment of long-term investments
|
|
(22,353)
|
|
249
|
|
456
|
70
|
|
(22,353)
|
|
(33,001)
|
(5,058)
|
|
Loss before income
tax
|
|
(329,371)
|
|
(43,427)
|
|
(56,209)
|
(8,614)
|
|
(661,928)
|
|
(224,750)
|
(34,445)
|
|
Income tax benefit
|
|
6,972
|
|
-
|
|
1
|
-
|
|
7,642
|
|
3,654
|
560
|
|
Net
loss
|
|
(322,399)
|
|
(43,427)
|
|
(56,208)
|
(8,614)
|
|
(654,286)
|
|
(221,096)
|
(33,885)
|
|
Less: Net income (loss) attributable to noncontrolling
interests
|
|
347
|
|
546
|
|
(101)
|
(15)
|
|
(3,018)
|
|
2,130
|
326
|
|
Net loss
attributable to 500.com Limited
|
|
(322,746)
|
|
(43,973)
|
|
(56,107)
|
(8,599)
|
|
(651,268)
|
|
(223,226)
|
(34,211)
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in unrealized (loss) gain
|
|
(3,986)
|
|
739
|
|
16
|
2
|
|
(3,986)
|
|
(1,218)
|
(187)
|
|
Foreign currency translation (loss) gain
|
|
(2,777)
|
|
(7,661)
|
|
(7,853)
|
(1,204)
|
|
6,408
|
|
(11,825)
|
(1,812)
|
|
Other
comprehensive (loss) income, net of tax
|
|
(6,763)
|
|
(6,922)
|
|
(7,837)
|
(1,202)
|
|
2,422
|
|
(13,043)
|
(1,999)
|
|
Comprehensive
loss
|
|
(329,162)
|
|
(50,349)
|
|
(64,045)
|
(9,816)
|
|
(651,864)
|
|
(234,139)
|
(35,884)
|
|
Less: Comprehensive income (loss) attributable to
noncontrolling interests
|
|
(979)
|
|
546
|
|
(101)
|
(15)
|
|
(4,344)
|
|
2,130
|
326
|
|
Comprehensive loss
attributable to 500.com Limited
|
|
(328,183)
|
|
(50,895)
|
|
(63,944)
|
(9,801)
|
|
(647,520)
|
|
(236,269)
|
(36,210)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B
ordinary shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
429,982,761
|
|
430,014,891
|
|
430,018,184
|
430,018,184
|
|
428,586,305
|
|
430,011,263
|
430,011,263
|
|
Diluted
|
|
429,982,761
|
|
430,014,891
|
|
430,018,184
|
430,018,184
|
|
428,586,305
|
|
430,011,263
|
430,011,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per share
attributable to 500.com Limited-
Basic and Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(0.75)
|
|
(0.10)
|
|
(0.13)
|
(0.02)
|
|
(1.52)
|
|
(0.52)
|
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per ADS*
attributable to 500.com Limited-
Basic and Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(7.51)
|
|
(1.02)
|
|
(1.30)
|
(0.20)
|
|
(15.20)
|
|
(5.19)
|
(0.80)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* American Depositary
Shares, which are traded on the NYSE. Each ADS represents ten Class
A ordinary shares of the Company.
|
|
500.com
Limited
Reconciliation of non-GAAP results of operations measures to the
nearest comparable GAAP measures
(Amounts in thousands of Renminbi ("RMB") and U.S. dollars
("US$"),
except for number of shares, per share (or ADS)
data)
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
December 31,
2019
|
|
September 30,
2020
|
|
December 31,
2020
|
December 31,
2020
|
|
December 31,
2019
|
|
December 31,
2020
|
December 31,
2020
|
|
|
RMB
|
|
RMB
|
|
RMB
|
US$
|
|
RMB
|
|
RMB
|
US$
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Unaudited
|
|
Audited
|
|
Unaudited
|
Unaudited
|
|
Operating loss
from continuing operations
|
|
(307,098)
|
|
(50,237)
|
|
(51,441)
|
(7,883)
|
|
(642,839)
|
|
(190,792)
|
(29,241)
|
|
Adjustment for share-based compensation expenses
|
|
15,181
|
|
12,626
|
|
19,046
|
2,919
|
|
79,275
|
|
55,424
|
8,494
|
|
Adjustment for Impairment of intangible assets
|
|
181,845
|
|
-
|
|
-
|
-
|
|
181,845
|
|
-
|
-
|
|
Adjustment for impairment of goodwill
|
|
41,618
|
|
-
|
|
-
|
-
|
|
129,752
|
|
-
|
-
|
|
Adjusted operating
loss from continuing operations (non-
GAAP)
|
|
(68,454)
|
|
(37,611)
|
|
(32,395)
|
(4,964)
|
|
(251,967)
|
|
(135,368)
|
(20,747)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to 500.com Limited
|
|
(322,746)
|
|
(43,973)
|
|
(56,107)
|
(8,599)
|
|
(651,268)
|
|
(223,226)
|
(34,211)
|
|
Adjustment for share-based compensation expenses
|
|
15,181
|
|
12,626
|
|
19,046
|
2,919
|
|
79,275
|
|
55,424
|
8,494
|
|
Adjustment for Impairment of intangible assets
|
|
181,845
|
|
-
|
|
-
|
-
|
|
181,845
|
|
-
|
-
|
|
Adjustment for impairment of goodwill
|
|
41,618
|
|
-
|
|
-
|
-
|
|
129,752
|
|
-
|
-
|
|
Adjustment for Impairment of long-term investments
|
|
22,353
|
|
(249)
|
|
(456)
|
(70)
|
|
22,353
|
|
33,001
|
5,058
|
|
Adjustment for deferred tax benefit relating to valuation
allowance
|
|
(7,669)
|
|
-
|
|
-
|
-
|
|
(7,669)
|
|
(3,659)
|
(561)
|
|
Adjusted net loss
attributable to 500.com Limited (non-
GAAP)
|
|
(69,418)
|
|
(31,596)
|
|
(37,517)
|
(5,750)
|
|
(245,712)
|
|
(138,460)
|
(21,220)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B
ordinary shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
429,982,761
|
|
430,014,891
|
|
430,018,184
|
430,018,184
|
|
428,586,305
|
|
430,011,263
|
430,011,263
|
|
Diluted
|
|
429,982,761
|
|
430,014,891
|
|
430,018,184
|
430,018,184
|
|
428,586,305
|
|
430,011,263
|
430,011,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per share
attributable to 500.com Limited (non-
GAAP)-Basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (non-GAAP)
|
|
(0.16)
|
|
(0.07)
|
|
(0.09)
|
(0.01)
|
|
(0.57)
|
|
(0.32)
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per
ADS* attributable to 500.com Limited (non-
GAAP)-Basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (non-GAAP)
|
|
(1.61)
|
|
(0.73)
|
|
(0.87)
|
(0.13)
|
|
(5.73)
|
|
(3.22)
|
(0.49)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* American Depositary
Shares, which are traded on the NYSE. Each ADS represents ten Class
A ordinary shares of the Company.
|
View original
content:http://www.prnewswire.com/news-releases/500com-limited-announces-unaudited-financial-results-for-the-fourth-quarter-and-full-year-ended-december-31-2020-301223828.html
SOURCE 500.com Limited