SHANGHAI, March 29, 2021 /PRNewswire/ -- The9 Limited
(NASDAQ: NCTY) ("The9") announced that it filed its annual report
on Form 20-F for the fiscal year ended December 31, 2020 with the U.S. Security and
Exchange Commission ("SEC") on March 29,
2021. The annual report, which contains its audited
financial statements, can be accessed on the SEC's website at
http://www.sec.gov as well as on the Company's investor relations
website at http://www.the9.com/en/. Shareholders may receive a hard
copy of the annual report free of charge upon request.
Recent Development:
In January 2021, The9 entered into
a share subscription and warrant purchase agreement with the
holding entities of several investors including Mr. JianPing Kong in the cryptocurrency mining
industry in anticipation of developing its cryptocurrency mining
business with the assistance of those investors. Pursuant to the
purchase agreement, The9 issued certain ordinary shares and
warrants to the investors. The warrants are divided into four equal
tranches, the exercisability of which are subject to the market
capitalization of The9 ranging from US$100
million, US$300 million,
US$500 million and US$1 billion within certain time period.
Since then, The9 has been actively developing its cryptocurrency
mining business, which primarily include the following:
In February 2021, NBTC Limited,
the wholly-owned subsidiary of The9, signed a strategic cooperation
framework purchase agreement, with Shenzhen MicroBT Electronics
Technology Co., Ltd., the manufacturer of WhatsMiner bitcoin mining
machines. Pursuant to the agreement, NBTC Limited paid a deposit of
US$1.4 million and obtained the right
of first offer to purchase 5,000 WhatsMiner bitcoin mining machines
from MicroBT within one year. As of today, The9 group had completed
two batches of purchase and bought 922 WhatsMiner machines, with an
approximate hash rate of 66PH/s. These WhatsMiner machines have
already been deployed.
In March 2021, 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$82.8 million payable by
installments according to the agreed time schedule. The first
installment of US$16.6 million had
been paid.
In February 2021, The9 entered
into purchase agreements with five Bitcoin mining machine owners to
purchase Bitcoin mining machines by issuance of its ordinary
shares. Pursuant to the purchase agreements, the Company issued an
aggregate of 26,838,360 Class A ordinary shares (equivalent to
894,612 ADSs) at US$0.37 per ordinary
share (equivalent to US$11.18 per
ADS) in exchange for 26,007 Bitcoin mining machines, with a total
hash rate of approximately 549PH/S.
In February 2021, The9 signed six
legally binding memoranda of understanding with six Bitcoin mining
machine owners to purchase Bitcoin mining machines by issuance of
ordinary shares. As of today, The9 has entered into definitive
purchase agreements with five Bitcoin mining machine owners and
The9 has issued an aggregate of 3,832,830 ordinary shares
(equivalent to 127,761 ADSs) at US$0.78 per ordinary share (equivalent to
US$23.35 per ADS) in exchange for
8,489 Bitcoin mining machines, with a total hash rate of
approximately 156PH/S.
In March 2021, The9 signed three
legally-binding memoranda of understanding with three Bitcoin
mining machine owners to purchase Bitcoin mining machines by
issuance of ordinary shares. According to the memoranda of
understanding, The9 should issue approximately 5,883,750 ordinary
shares (equivalent to 196,125 ADSs) to the sellers based on a per
share price of approximately US$1.3
per Class A ordinary share (equivalent to US$38.51 per ADS) in exchange for 10,252 Bitcoin
mining machines, with a total hash rate of approximately
192PH/S.
In February 2021, the Company
signed a framework agreement with a Filecoin mining machine vendor
to purchase Filecoin mining machines for US$10 million.
In February 2021, The9 entered
into a standby equity distribution agreement with YA II PN, LTD., a
Cayman Islands exempt limited
partnership managed by Yorkville Advisor Global, LP pursuant to
which The9 is able to sell up to US$100.0
million of ADSs solely at The9's request at any time during
the 36 months following the date of the agreement. As of today,
The9 has not started to request funding from this equity line.
As of today, The9's deployed Bitcoin mining machines are
contributing a total hash rate of approximately 693PH/S. Under this
current hash rate, The9 is rewarded 3 Bitcoins per day. As of
today, The9 has been rewarded 126 Bitcoins.
Based on the Bitcoin mining machines currently owned by The9 and
taking account to the mining machines purchase agreements The9 had
signed, assuming The9 does not sign any new purchase agreement and
assuming global hash rate does not increase, by October 2022 The9's Bitcoin mining machines are
expected to contribute a total hash rate of approximately
3,558PH/S. Under this hash rate, The9 is expected to be rewarded
approximately 15 Bitcoins per day. The cumulative Bitcoins reward
is expected to be approximately 5,200 Bitcoins.
Other than Bitcoins, the Company is also actively engaged in the
mining of Filecoins. As of today, the Company has executed
US$1.1 million purchase of Filecoin
mining machines under the framework agreement with a Filecoin
mining machine vendor. The Company will continue to purchase
Filecoin mining machines based on market situation. Currently The9
owns an independent node on Filecoin blockchain and 8 Pebibyte of
effective storage mining power in the Filecoin network. Assuming
global hash rate does not increase, by August 2022 this 8 Pebibyte of effective storage
mining power is expected to generate approximately 200,000
Filecoins for The9. However since the hash rate of the whole
Filecoin network is increasing continuously, the actual reward to
The9 will be less than 200,000 Filecoin. The9 will continue to
invest into Filecoin mining machines according to the growth of
Filecoin's market value.
Convenience Currency Translation
The translation of Renminbi (RMB) into US dollars
(US$) in this press release is presented solely for the convenience
of readers. The translation was made based on the noon buying rate
for U.S. dollars in the City of New
York for cable transfers in Renminbi as certified for
customs purposes by the Federal Reserve Bank of New York, on December
31, 2020, which was RMB6.5250
to US$1.00. Such translations should
not be construed as any representation that the related RMB amounts
represent, have been or could be converted into U.S. dollars at
that or any other exchange rate. The percentages stated in this
press release are calculated based on the RMB amounts.
Conference Call / Webcast Information
The9's management team will host a conference
call and webcast on March 30, 2021 at
8:00 AM, U.S. Eastern Time
(corresponding to March 30, 2021 at
8:00 PM, Beijing Time), to present an
overview of The9's cryptocurrency mining business.
Investors, analysts and other interested parties
will be able to access the live conference by calling:
PARTICIPANT DIAL IN
(TOLL FREE):
|
1-888-346-8982
|
PARTICIPANT
INTERNATIONAL DIAL IN:
|
1-412-902-4272
|
Canada Toll
Free:
|
18556699657
|
Hong Kong Toll
Free:
|
800-905945
|
China Toll
Free:
|
4001-201203
|
Hong Kong-Local
Toll:
|
852-301-84992
|
Additionally, The9 will also provide a live webcast of the call
at https://services.themediaframe.com/links/ncty210330.html
About The9 Limited
The9 Limited is an Internet company based in
China listed on Nasdaq in 2004.
The9 aims to become a diversified high-tech Internet company.
Safe Harbor Statement
This announcement contains forward-looking statements.
These statements are made under the "safe harbor" provisions of 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" and similar statements. Among other things,
the business outlook and quotations from management in this press
release contain forward-looking statements. The9 may also make
written or oral forward-looking statements in its periodic reports
to the U.S. Securities and Exchange Commission on Forms 20-F and
6-K, etc., in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that
are not historical facts, including statements about The9's beliefs
and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential
risks and uncertainties include, but are not limited to, political
and economic policies of the Chinese government, the laws and
regulations governing the cryptocurrency and online game
industries, The9's ability to obtain sufficient funding to maintain
its business operations, anticipate and adapt to changing
technological changes and respond to competitive market conditions,
and other risks and uncertainties outlined in The9's filings with
the U.S. Securities and Exchange Commission, including its annual
reports on Form 20-F. The9 does not undertake any obligation to
update any forward-looking statement, except as required under
applicable law.
– Tables follow –
THE9
LIMITED
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME INFORMATION
|
|
|
|
|
|
|
|
(Expressed in
Renminbi - RMB and US Dollars - US$, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
2020
|
|
|
|
RMB
|
|
RMB
|
|
US$
(Note)
|
Revenues:
|
|
|
|
|
|
|
|
Online game
services
|
|
|
303,577
|
|
625,488
|
|
95,860
|
Other
revenues
|
|
|
39,500
|
|
-
|
|
-
|
|
|
|
343,077
|
|
625,488
|
|
95,860
|
Sales
taxes
|
|
|
(1,582)
|
|
-
|
|
-
|
Total net
revenues
|
|
|
341,495
|
|
625,488
|
|
95,860
|
Cost of
revenues
|
|
|
(1,342,266)
|
|
(814,136)
|
|
(124,772)
|
Gross profit
(loss)
|
|
|
(1,000,771)
|
|
(188,648)
|
|
(28,912)
|
Operating (expenses)
income:
|
|
|
|
|
|
|
|
Product
development
|
|
|
(13,090,530)
|
|
(2,438,095)
|
|
(373,654)
|
Sales
and marketing
|
|
|
(2,114,519)
|
|
(646,492)
|
|
(99,079)
|
General
and administrative
|
|
|
(113,867,000)
|
|
(108,747,919)
|
|
(16,666,348)
|
Impairment on other long-lived assets
|
|
|
(34,881,000)
|
|
(6,515,200)
|
|
(998,498)
|
Impairment on advance and other assets
|
|
|
-
|
|
(20,371,500)
|
|
(3,122,069)
|
Gain on
disposal of subsidiaries
|
|
|
1,206,925
|
|
475,588,803
|
|
72,887,173
|
Total operating
(expenses) income
|
|
|
(162,746,124)
|
|
336,869,597
|
|
51,627,525
|
Other operating
income, net
|
|
|
30,240
|
|
27,358
|
|
4,193
|
(Loss) income from
operations
|
|
|
(163,716,655)
|
|
336,708,307
|
|
51,602,806
|
Impairment on equity
investments
|
|
|
(4,666,128)
|
|
(1,172,755)
|
|
(179,733)
|
Impairment on other
investments
|
|
|
(3,791,039)
|
|
(18,000,000)
|
|
(2,758,621)
|
Impairment on other
advances
|
|
|
(5,980,788)
|
|
-
|
|
-
|
Interest
income
|
|
|
18,576
|
|
429,732
|
|
65,859
|
Interest
expense
|
|
|
(34,501,556)
|
|
(4,070,179)
|
|
(623,782)
|
Fair value change on
warrants liability
|
|
|
1,292,244
|
|
37,851
|
|
5,801
|
Gain on disposal of
equity investee and available-for-sale
investments
|
|
|
694,628
|
|
174,295
|
|
26,712
|
Gain on disposal of
other investments
|
|
|
13,430,588
|
|
2,818,643
|
|
431,976
|
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
loss
|
|
|
(5,474,002)
|
|
(8,319,669)
|
|
(1,275,045)
|
Other income,
net
|
|
|
9,372,652
|
|
2,005,143
|
|
307,302
|
(Loss) income
before income tax expense and share of loss
in equity method investments
|
|
|
(193,321,480)
|
|
402,764,770
|
|
61,726,402
|
Income tax
benefit
|
|
|
-
|
|
(7,165,097)
|
|
(1,098,099)
|
Share of loss in
equity method investments
|
|
|
(2,847,260)
|
|
(2,165,935)
|
|
(331,944)
|
Net (loss)
income
|
|
|
(196,168,740)
|
|
393,433,738
|
|
60,296,359
|
Net (loss) gain
attributable to noncontrolling interest
|
|
|
(13,517,983)
|
|
(3,259,528)
|
|
(499,545)
|
Net (loss) gain
attributable to redeemable noncontrolling interest
|
|
|
(4,855,589)
|
|
(1,190,122)
|
|
(182,394)
|
Net income
attributable to The9 Limited
|
|
|
(177,795,168)
|
|
397,883,388
|
|
60,978,298
|
Change in redemption
value of redeemable noncontrollling interest
|
|
|
(12,827,598)
|
|
(1,190,122)
|
|
(182,394)
|
Net (loss) income
attributable to holders of ordinary shares
|
|
|
(190,622,766)
|
|
396,693,266
|
|
60,795,904
|
Other comprehensive
loss,net of tax:
|
|
|
|
|
|
|
|
Currency translation
adjustments
|
|
|
(793,531)
|
|
3,516,774
|
|
538,969
|
Total
comprehensive (loss) income
|
|
|
(196,962,271)
|
|
396,950,512
|
|
60,835,328
|
Comprehensive (loss)
income attributable to:
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
(19,738,118)
|
|
13,157,497
|
|
2,016,475
|
Redeemable
noncontrolling interest
|
|
|
(4,855,589)
|
|
(1,190,122)
|
|
(182,394)
|
The9
Limited
|
|
|
(172,368,564)
|
|
384,983,137
|
|
59,001,247
|
Net (loss) income
attributable to holders of ordinary shares per
share
|
|
|
|
|
|
|
|
-
Basic
|
|
|
(1.79)
|
|
2.42
|
|
0.37
|
- Diluted
|
|
|
(1.79)
|
|
2.42
|
|
0.37
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
-
Basic
|
|
|
106,407,008
|
|
163,599,920
|
|
163,599,920
|
- Diluted
|
|
|
106,407,008
|
|
163,599,920
|
|
163,599,920
|
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$1.00
=
RMB6.5250, representing the noon buying rate on the last
trading
day of December 2020 (December 31, 2020) as set forth in the
H.10 statistical release of the U.S. Federal Reserve
Board.
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THE9
LIMITED
|
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CONSOLIDATED
BALANCE SHEETS INFORMATION
|
|
|
|
(Expressed in
Renminbi - RMB and US Dollars - US$)
|
|
|
|
|
|
As of
December 31,
2019
|
As of December 31,
2020
|
|
|
RMB
|
RMB
|
US$
|
|
|
|
|
(Note)
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
10,113,141
|
31,696,237
|
4,857,661
|
Accounts receivable,
net of allowance for doubtful
accounts of RMB1,319,331 and RMB233,213 as of
December 31, 2019 and 2020, respectively
|
|
110,437
|
2,981
|
457
|
Advances to
suppliers
|
|
11,246,608
|
27,725
|
4,249
|
Prepayments and other
current assets
|
|
8,848,534
|
9,855,467
|
1,510,416
|
Amounts due from
related parties
|
|
758,761
|
732,705
|
112,292
|
Assets classified as
held-for-sale
|
|
123,390,350
|
-
|
-
|
Total current
assets
|
|
154,467,831
|
42,315,115
|
6,485,075
|
Investments
|
|
10,000,000
|
-
|
-
|
Property, equipment
and software, net
|
|
1,218,521
|
977,102
|
149,747
|
Operating lease
right-of-use assets
|
|
9,257,604
|
5,149,090
|
789,133
|
Other long-lived
assets, net
|
|
6,515,200
|
-
|
-
|
Total
Assets
|
|
181,459,156
|
48,441,307
|
7,423,955
|
|
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interest
and Shareholders' Equity (Deficit)
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Short-term
borrowings
|
|
117,526,089
|
-
|
-
|
Accounts
payable
|
|
38,232,425
|
35,597,417
|
5,455,543
|
Other taxes
payable
|
|
1,203,644
|
1,293,423
|
198,226
|
Advances from
customers
|
|
39,527,778
|
38,011,992
|
5,825,593
|
Other
advances
|
|
56,276,200
|
-
|
-
|
Amounts due to
related
parties
|
|
74,379,529
|
30,258,237
|
4,637,278
|
Refund of game
points
|
|
169,998,682
|
169,998,682
|
26,053,438
|
Warrants
|
|
198,600
|
1,854,957
|
284,285
|
Convertible
notes
|
|
414,127,908
|
-
|
-
|
Interest
payable
|
|
5,371,931
|
-
|
-
|
Accrued expenses and
other current liabilities
|
|
93,140,843
|
83,570,873
|
12,807,795
|
Current portion of
operating lease liabilities of the
consolidated VIE without recourse to the Group
|
|
3,407,670
|
3,787,210
|
580,415
|
Liabilities directly
associated with assets held for sale
|
|
44,691,296
|
-
|
-
|
Total current
liabilities
|
|
1,058,082,595
|
364,372,791
|
55,842,573
|
Non-current portion
of operating lease liabilities of the
consolidated VIE without recourse to the Group
|
|
6,251,705
|
2,464,495
|
377,700
|
Total
Liabilities
|
|
1,064,334,300
|
366,837,286
|
56,220,273
|
|
|
|
|
|
Redeemable
Noncontrolling Interest
|
|
349,046,548
|
349,046,548
|
53,493,724
|
Shareholders'
Equity (Deficit):
|
|
|
|
|
Class A ordinary
shares (US$0.01 par value;
4,300,000,000 shares authorized, 103,737,691 and
247,090,351 shares issued and outstanding as of
December 31, 2019 and 2020, respectively)
|
|
7,321,099
|
17,197,060
|
2,635,565
|
Class B ordinary
shares (US$0.01 par value;
600,000,000 shares authorized, 9,192,011 and
12,942,011 shares issued and outstanding as of
December 31, 2019 and 2020, respectively)
|
|
648,709
|
900,741
|
138,045
|
Additional paid-in
capital
|
|
2,539,552,478
|
2,695,763,016
|
413,143,757
|
Statutory
reserves
|
|
28,071,982
|
7,326,560
|
1,122,844
|
Accumulated other
comprehensive loss
|
|
(3,777,952)
|
(16,678,203)
|
(2,556,046)
|
Accumulated
deficit
|
|
(3,410,856,231)
|
(2,992,227,421)
|
(458,578,915)
|
The9 Limited
shareholders' deficit
|
|
(839,039,915)
|
(287,718,247)
|
(44,094,750)
|
Noncontrolling
interest
|
|
(392,881,777)
|
(379,724,280)
|
(58,195,292)
|
Total
shareholders' deficit
|
|
(1,231,921,692)
|
(667,442,527)
|
(102,290,042)
|
Total liabilities,
redeemable noncontrolling
interest and shareholders' equity(deficit)
|
|
181,459,156
|
48,441,307
|
7,423,955
|
|
|
|
|
|
|
|
|
|
|
Note:The United
States dollar ("US dollar" or "US$")
amounts disclosed in the accompanying financial
statements are presented solely for the convenience
of the readers at the rate of US$1.00 = RMB6.5250,
representing the noon buying rate on the last trading
day of December 2020 (December 31, 2020) as set
forth in the H.10 statistical release of the U.S.
Federal Reserve Board.
|
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View original
content:http://www.prnewswire.com/news-releases/the9-limited-reports-2020-audited-financial-results-301257961.html
SOURCE The9 Limited